Economic Watch: 2013 Home Sales Best in Five Years Despite December Decline
January 27, 2014
Sales of new homes in the U.S. fell 7% in December from the month before, following a November drop of 3.9% from the month before, according to a new U.S. Commerce Department report.
The decline last month pulled the annual rate down to 414.000 new home sales while for all of 2013 it was 16.4% higher than the year before, at an annual rate of 428,000, the best since 2008.
“New home sales continued to slow at the end of the year, following heightened activity earlier in 2013 front running the threat of a change in Fed policy. While sales have declined, activity remains positive, reverting to the underlying trend,” said Lindsey M. Piegza, chief economist with the investment firm Sterne Agee. “We have long argued the Federal Reserve ought to have delayed tapering until there was clear evidence of sustainable momentum in the economy, as committee members claimed was the prerequisite for initiating a rollback in monthly bond purchases.”
The performance of new home sales in December and November follows a blistering increase in October, when it advanced nearly 15% from the month before.
Some analysts believe cold weather again in December also hurt sales like it did in November, with the Northeast seeing a huge drop in sales last month, while the supply of total new homes for sale in Decmeber fell to its lowest level since July.