The sales of new single-family homes in the United States increased in December to their highest rate in last 10 months, the most recent sign that the housing economy stayed on firmer ground regardless of a tremendous stock market sell-out and retarded economic growth.
The Commerce Department said on Wednesday that sales a month ago rose 10.8 percent to a seasonally balanced yearly rate of 544,000 units, this is the highest amount since February. December deals were probably floated by unseasonably mellow climate and an ascent in the supply of homes in the market, which expanded options for potential purchasers.
This event is a promising sign for the housing sector as it transitions to the year 2016, said Tian Liu, chief economist at Genworth Mortgage Insurance in Raleigh, N.C. They expect the solid increment in new-home sales to proceed as the fundamentals in the housing market stay solid and new vintage homes are becoming harder to come by.
New-home sales took off 14.5 percent, to 501,000 units in 2015, the highest record since to 2007. Housing is being supported by tightening labor market conditions, which are spurring a rise in household formation.
A firmer housing market ought to put a floor under the economy, which has been battered by the headwinds of a strong dollar, spending cuts by energy companies affected by lowered oil prices and a slump worldwide demand. Endeavors by companies and businesses to mitigate a potential inventory bloat is also a factor in the slow growth.
The stock trading sell-off, which has acquired a dive the Standard and Poor's 500-stock index this month, is also contributing to the problem.
The inventory of new homes available rose to 237,000 units a month ago, from 231,000 units in November. At December's selling pace it would take 5.2 months to accommodate the supply of houses available, unlike the 5.6-month estimate in November.