The numbers: U.S. new home sales jumped 12.4% to a seasonally-adjusted annual rate of 744,000 in November from a revised 662,000 in the prior month, the government reported Thursday. The revised October sales was the lowest since the worst period of the pandemic in April 2020.
Despite the jump, the pace of sales was below expectations because of the sharp downward revision. Analysts polled by The Wall Street Journal had forecast new-home sales to occur at a seasonally-adjusted annual rate of 766,000 in November.
The data are often revised sharply. Sales in October were initially reported at 745,000.
Key details: The median sales price of new houses sold in October was $416,900 marking a new record high. The supply of new homes for sale fell by 8.5% between October and November, equating to a 6.5-month supply.
Regionally, sales rose in all regions in November except the Midwest. Sales were strongest in the West.
Big picture: The housing sector remains robust but off the highs seen last year. Sales are 14% below last year’s level.
Although the sector is expected to continue to be strong, the prospect of higher mortgage rates should keep activity from getting red-hot, economists said.
What are they saying: “This is a seriously odd report. We would not be at all surprised to see both the October and November numbers being revised up substantially. In the meantime, the rising trend in mortgage applications probably is a better guide to the underlying state of demand in the housing market,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Market reaction: Stocks were higher on Thursday on continued optimism that the omicron variant would not detail the global economy.