SALES OF new US homes unexpectedly tumbled in September, their first drop in six months, underscoring the hazards to an economic recovery even as businesses appeared to be stepping up investment.
New single-family home sales fell 3.6 per cent to a 402,000 unit annual pace from a downwardly revised 417,000 units in August, the US commerce department said yesterday.
Analysts polled by Reuters had expected sales to rise to a 440,000 unit pace.
A separate report from the US Mortgage Bankers’ Association showed demand for mortgages has fallen for the past three weeks as buyers move to the sidelines ahead of the November 30th expiration of a popular home-buyers’ tax credit.
“One month is obviously not a trend and I think there is plenty of evidence that things are turning around. I still believe the economy has hit bottom and is on the way up, but it will be a long, slow process,” said Mark Bonhard, an investment adviser at Dawson Wealth Management in Cleveland, Ohio.
The housing data represented a road bump in a recovery that otherwise appears to be widening.
Another commerce department report showed that new orders for long-lasting US manufactured goods rose 1 per cent in September as businesses stepped-up investment plans.
US stock indices extended losses on the housing data, while prices for government debt added to gains and the US dollar rose against the euro.
At a meeting next week, US Federal Reserve officials will sift through the data to try to determine when they should begin to withdraw their extraordinary support for the economy.
With some lingering concern over the outlook, officials look set to take a go-slow approach.
Despite the drop in home sales, the number of new homes for sale at the end of the month hit the lowest level in 27 years.
At September’s sales pace, that left the supply of homes available at 7.5 months’ worth, the same as in August.
The median sales price rose to $204,800 (€139,000) from $199,900.
The data came as a disappointment after a report last week showed that sales of previously owned home jumped to a two-year high in the US, spurred by the $8,000 tax credit for new buyers. – (Reuters)
