New U.S. single-family home sales unexpectedly rose in September, pointing to sustained demand for housing even as data for the prior three months were revised lower.
Other reports on Wednesday suggested a stronger pickup in economic growth in the third quarter than is currently anticipated. The goods trade deficit narrowed sharply, while both wholesale and retail inventories increased in September.
“A lot of the pieces of the puzzle have come back together in a positive direction, with a pickup in the export of goods to the rest of the world and new home sales,” said Chris Rupkey, chief economist at MUFG Union Bank in New York.
The Commerce Department said new home sales increased 3.1 percent to a seasonally adjusted annual rate of 593,000 units last month, pulling them close to a nine-year high touched in July. However, the pace for the prior three months was revised down by a total of 85,000 units from previous estimates.
New home sales, which are derived from building permits, are volatile on a month-to-month basis and subject to large revisions. Sales increased 29.8 percent from a year ago.
Economists had forecast single-family home sales, which account for about 9.8 percent of overall home sales, falling to a rate of 600,000 units last month.
“The housing market may not be booming but it is clearly moving forward at a steady pace,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. “But the big problem is still the lack of inventory. Builders are cautious and tend to do very little speculative construction.”
Despite the downward revisions, new home sales rose in the third quarter compared to the April-June period. Residential construction, however, likely remained a mild drag on gross domestic product for a second straight quarter.
According to a Reuters survey of economists, GDP probably increased at a 2.5 percent rate in the third quarter, quickening from the second-quarter’s tepid 1.4 percent pace.
But advance data on Wednesday showing the goods trade deficit falling 5.2 percent to $56.1 billion in September amid strong exports suggested that third-quarter GDP growth could exceed expectations.
U.S. new home sales up 3.1% in September
October 27, 2016 by Leave a Comment