While the Commerce Department released a report on Tuesday showing a drop in new home sales in the U.S. in the month of November, sales still came in above economist estimates due to an upward revision to the October data.
The report said new home sales fell 2.1 percent to a seasonally adjusted annual rate of 464,000 in November from the revised October rate of 474,000.
Economists had expected sales to climb to edge up to 450,000 from the 444,000 originally reported for the previous month.
With the upward revision, the annual rate seen in October reflected the highest since new home sales hit a rate of 477,000 in July of 2008.
The Commerce Department noted that new home sales in November are up by 16.6 percent compared to the same month a year ago despite the monthly decrease.
The report also said the median sales price of new houses sold in November was $270,900, up 4.5 percent from $259,200 in October and up 10.6 percent from $245,000 in November of 2012.
The seasonally adjusted estimate of new houses for sale at the end of November was 167,000 compared to 179,000 at the end of October.
Housing inventory represents 4.3 months of supply at the current sales rate versus 4.5 months of supply in the previous month.
The report also showed that new home sales in the Midwest tumbled by 26.6 percent, while sales in the South fell by 9.1 percent.
On the other hand, new home sales in the West surged up by 31.1 percent and sales in the Northeast climbed by 15.2 percent.
"In contrast with a pull-back in existing home sales, new home sales remain elevated, a signal that demand is still strong but limited by inventory," said Mei Li, Economic Analyst at FTN Financial. "Also, buyers appear eager to grab currently affordable mortgage rates before they go higher."
"With the tapering announced, mortgage rates are within 10bp of the sustained highs from this summer," she added. "Cost pressure/builder profit related to low inventories and the affordability of rates will be key to the housing market's continued momentum."
Last Thursday, the National Association of Realtors released a report showing that existing home sales in the U.S. fell by more than expected in the month of November.
NAR said existing home sales dropped 4.3 percent to a seasonally adjusted annual rate of 4.90 million in November after falling 3.2 percent to 5.12 million in October. Economists had expected existing home sales to dip to an annual rate of 5.02 million.
Existing home sales fell for the third consecutive month, dropping to their lowest level since a matching rate in December of 2012.
by RTT Staff Writer
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