US new home sales tumble in October
Sales of new US single-family homes tumbled in October, according to data from the Commerce Department.
New home sales declined by 8.9% to a seasonally-adjusted annual rate of 544,000, below expectations for a level of 575,000 and compared to a revised level of 597,000 in September.
Sales were down 12% from October 2017's level of 618,000.
Meanwhile, the median price of a new home was $309,700 last month compared to $321,300 in September.
The figures also showed that the seasonally‐adjusted estimate of new houses for sale at the end of October was 336,000. This represents a supply of 7.4 months at the current sales rate.
Ian Shepherdson, chief economist at Pantheon Macroeconomics said weather effects were likely to blame for the fall.
"This looks bad but the net revision was a hefty +53K, so October sales plus the revision was 597K, above consensus. We expected a 600K print, assuming a rebound from the Hurricane Florence hit, but these data are volatile and unreliable; the official margin of error in October sales is +/-75K.
"The data now point to a hefty rebound in new home sales over the next few months. We are happy to argue that the trend in sales has peaked for both new and existing homes, but the emerging market narrative of a meltdown in the market is overdone. Prices likely will rebound somewhat from their recent declines as sales recover through the late fall and winter, but inventory is up 17.5% y/y, and that’s a real drag."