US new-home sales best since 2009

Written By Unknown on Minggu, 27 Januari 2013 | 20.24

25 January 2013 Last updated at 11:59 ET

US new-home sales slowed in December, but that did not take the shine off the market seeing its best year since 2009.

The Commerce Department said new-home sales fell 7.3% month-on-month to a seasonally-adjusted annual rate of 369,000 units.

For the year, sales were up almost 20% to an annual rate of 367,000, but below the 700,000 level economists see as healthy for the housing industry.

Sales of previously-owned homes rose to 4.65 million, the most in five years.

Last year's rise came on the back of more stable employment data and record-low mortgages. The Commerce Department said that the average price of newly-built homes rose slightly, which may have contributed to December's fall.

"This [fall] should prove to be a temporary blip as the US housing market continues its gradual recovery," said Andrew Grantham, an economist at CIBC World Markets.

The US National Association of Homebuilders estimates that each new house built creates an average of three jobs for a year and generates about $90,000 (£57,000) in tax revenue.

It is roughly five years since the US housing market bubble started to deflate, helping to tip the economy into recession and exposing the extent of the sub-prime mortgage scandal in which many people took out loans that they had little prospect of repaying.

Strong employment levels and confidence about job prospects are crucial for a healthy housing market, economists say. The US unemployment rate, at 7.8%, is forecast to improve during 2013, but not dramatically. And GDP growth is expected to remain in low single digits.


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