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Economy in Brief

U.S. New Home Sales Improve Unexpectedly to Five-Year High
by Tom Moeller  February 26, 2014

Harsh winter weather didn't discourage home buyers last month. New home sales improved 9.6% to 468,000 (2.2% y/y), the highest level since July 2008. December sales were revised to 427,000 from 414,000. The latest figure beat expectations for 400,000 sales in the Action Economics Forecast Survey. These volume numbers are quoted at seasonally adjusted annual rates.

Sales in the South improved 10.4% to 276,000 (22.7% y/y), a new high for the recovery. In the Northeast sales recovered by three-quarters m/m to 33,000 (3.1% y/y) following a sharp December decline. Sales in the West also rebounded 11.0% to 111,000 (-23.4% y/y) and reversed December softness. Working the other way, new home sales in the Midwest fell 17.2% to 48,000 (-14.3% y/y), the lowest level since December 2012.

The median price of a new home during January fell 2.2% to $260,100 (+3.4% y/y) from a downwardly revised December reading. The average price of a new home increased 4.5% last month to $322,800 (5.2% y/y).

Sales improvement left the inventory of unsold homes roughly unchanged during the last four months (+23.5%). The months' sales supply of new homes fell to 4.7, the lowest level since June. The length of time to sell a new home ticked up m/m to 3.3 months, still down from 14.0 months at the end of 2009.

The data in this report are available in Haver's USECON database. The consensus expectation figure is from the Action Economics survey and is available in the AS1REPNA database.

Economic Conditions and Monetary Policy: A Transitional Phase Introduction from John C. Williams, President and CEO, Federal Reserve Bank of San Francisco is available here.

U.S. New Home Sales Jan Dec Nov Y/Y % 2013 2012 2011
Total SAAR, 000s 468 427 444 2.2 430 368 306
Northeast 33 19 32 3.1 31 29 21
Midwest 48 58 54 -14.3 60 47 45
South 276 250 247 22.7 233 196 168
West 111 100 111 -23.4 106 97 72
Median Price (NSA, $) 260,100 265,900 269,200 3.4 263,633 242,108 224,317
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