Falling mortgage rates lead to new home sales beating expectations

U.S. new home sales exceed expectations in December Mortgage rates fall attracts potential buyers.

Government data showed Thursday that purchases of new single-family homes rose 8% to 664,000 last month after an upward revision to November’s data. The median forecast in a Bloomberg survey of economists was 649,000 units.

The numbers show some momentum heading into 2024, highlighted by the first pickup in annual sales in three years. Mortgage rates fell by more than a percentage point late last year, which should give the industry an even bigger boost once the Fed starts cutting rates.

Median new home sales price fell for fourth straight month to $413,200 in December as more homes became available for sale Median new home sales price fell for fourth straight month to $413,200 in December, according to data , the supply of new homes hit 453,000 units in December, the highest level in more than a year, according to reports from the Census Bureau and Department of Housing and Urban Development.

Unlike the resale market, where existing homeowners are reluctant to sell their properties, builders are more willing to sell their properties. optimistic and apply for more Authorize Take into account the recent decline in borrowing costs.To help boost buyer interest, nearly two-thirds of homebuilders said they offer some form of loan excitation in January, according to data from the National Association of Home Builders and Wells Fargo.

Local distribution

By region, new home sales increased in three-quarters of the regions. New home sales in the Midwest rose to their highest level since July. Purchases in the South, the largest region in the United States, picked up after falling sharply in November.

New home sales are considered more timely than resale home purchases, which are calculated at the end of a contract. Decreased 1% month-on-month in December, capped Worst sales year in nearly three decades.

However, the data is not stable. The report shows that 90% of people believe that sales will range from a decline of 16.2% to a growth of 32.2%.

A report earlier Thursday showed the U.S. economy grew in the fourth quarter Frustration predictioncapping a surprisingly strong year and defying calls for a recession.

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