New home sales
surged 25.4% month-over-monthto an annualized pace of 444,000 in October.
This beat expectations for an annualized pace of 429,000.
New home sales fell 6.6% in September to an annualized pace of 354,000.
The September data was delayed because of the government shutdown.
The median sales price of new houses sold in October 2013 was $US245,800; the average sales price was $US321,700.
Meanwhile, the stock of new homes for sale at the end of October stood at 183,000, representing 4.9 months’ supply at the current sales pace.
“The jump is the result of a retracement of the sharp drop in the pace of purchases over the preceding three months when the level of sales averaged a paltry 368K,” Millan Mulraine of TD Securities said.
“In fact, the rise back to the 444K takes the level of sales back to the trend pace during the first 6 months of the year, and it suggests that activity in this sector sector may be back on track after the hit from higher mortgage rates during the summer months.”
Economists were expecting new home sales to slow as mortgage rates have remained elevated, with the 30-year fixed rate at 4.29%, according to the Freddie Mac’s November 27 primary mortgage market survey.
“The Federal government shutdown may have had an effect, as 17% of realtors said delays in IRS income verification weighed on sales in October,” according to UBS economist Maury Harris.
Other indicators of the housing market, like homebuilder sentiment and mortgage application have been softening. And the pending home sales index has been falling for some time now. And economists have been downgrading their home price forecasts for 2013 and 2014.
The housing recovery is expected to slow going forward.
Business Insider Emails & Alerts
Site highlights each day to your inbox.