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First Cut: November sales of single-family homes lift housing market gloom a bit

Sales of new single-family homes in November – the first of the catch-up reports after the Census Bureau was shuttered during the partial federal government shutdown – were up 16.9% to 657,000, rebounding from the declined to 562,000 in October from 613,000 in September.  The level was well above expectations and suggests that some of the gloom about conditions for in the housing market may have been overstated. Nonetheless, this is relatively old data and the numbers for December will be anxiously awaited when that report is rescheduled.

Sales were up strongly in three of four regions. There was a 100.0% jump in the Northeast, a 30.5% rebound in the Midwest, and a solid 20.6% gain for the South were available properties were scooped up after Hurricanes Michael and Florence destroyed housing stock. The West saw a 5.9% decline in sales of new home, probably related to lack of available stock after the wildfires devasted large areas.

The months’ supply of homes available for sale dropped to 6.0 in November after rising to 7.0 in October. It is back in line with the levels seen in the second half of 2018. New homes are more plentiful than existing homes, which may in part be the reason for the monthly increase.

Some of the gains cold be related to lower prices in a more competitive market with rising mortgage interest rates that climbed 20 basis points to 4.83% in November from October, and reached a near-term peak of 4.87% in December, but has since declined for January to around 4.46%.

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