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New Home Sales  
Released On 1/26/2012 10:00:00 AM For Dec, 2011
PriorConsensusConsensus RangeActual
New Home Sales - Level - SAAR315 K320 K309 K to 326 K307 K

Highlights
The home builders' housing market index may be indicating a surge of strength underway in the new home market, but this surge has yet to appear in current sales of new homes. New home sales fell 2.2 percent to a disappointingly soft annual rate of 307,000 vs the Econoday consensus for 320,000. Details show a swing lower in the South which in this series is by far the largest and most important region. Nationally, the number of new homes on the market slipped slightly but not enough to offset the larger decline in sales, making for an uptick to 6.1 months of supply. This is the first time in six months that this reading failed to improve.

Another disappointment in the report is the median price which fell 2.5 percent to $210,300. Year-on-year, the median price is down 12.8 percent for the worst reading of the recovery.

But lower prices in the month, not to mention lower mortgage rates, failed to spark much commitment to new home purchases. Though most indications on housing have been improving, today's report is a reminder of yesterday's FOMC assessment that the sector remains depressed. The Dow is moving off opening highs following this report.

Consensus Outlook
New home sales rose 1.6 percent in November to a 315,000 annual unit rate. However, the median price fell 3.8 percent in the month to $214,100 for a year-on-year decline of 2.5 percent. A key positive was a further draw down in available supply, to 158,000 units for a 1.3 percent dip in the month. This put supply at a recovery low of 6.0 months from 6.2 and 6.3 in the prior two months.

Definition
New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances.  Why Investors Care
 
[Chart]
There is no question that lower interest rates boost home sales. Other factors also impact housing decisions, such as employment and income growth, and wealth stemming from stock market gains.
Data Source: Haver Analytics
 
 

2012 Release Schedule
Released On: 1/262/243/234/245/236/257/258/239/2610/2411/2812/27
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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