New Home Sales Rebound; Increase Beats Analyst Expectations

As if the debate over the where the real estate markets will go in 2007 needed any further confusion, statistics released today by the Commerce Department showed that new home sales rebounded strongly during November, registering a monthly increase for the third time in the past four months and more than doubling analyst expectations. Sales of new one-family houses in November 2006 were at a seasonally adjusted annual rate of 1.05 million units. That represents a 3.4 percent increase above the revised October rate of 1,013,000, but is 15.3 percent below the numbers reported one year ago. Analysts had widely expected an increase of 1.6 percent from the previous month, according to financial information site Bloomberg. “This is a very good report, and is consistent with the idea that the rather abrupt downward correction in home sales from the unsustainable highs of 2005 has reached its end. Furthermore, inventories of unsold units are gradually being drawn down from their mid-year highs,” said David Seiders, Chief Economist of the National Association of Home Builders. “The data also confirm what our builder surveys have been telling us over the past several months — that buyer demand is firming up across many markets and that builders are looking forward to further improvements in sales activity in 2007.” Strong sales volume, however, may have been the result of a mean decrease in prices. The median sales price of new houses sold in November 2006 was $251,700, up from $243,800 in October; but the average sales price was down from $304,900 one month ago, reaching to $294,900, just slightly above the mean sale price of $294,400 reported to start the year. A seasonally-adjusted estimate of new houses for sale at the end of November stood at 545,000, representing a supply of 6.3 months at the current sales rate, the Commerce Department said.

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please