US existing home sales surge a record 14.7%

JAN 22, 201611:21 PM

[WASHINGTON] US home resales rebounded strongly in December from a 19-month low and prices surged, indicating the housing market recovery remained intact despite signs of a sharp moderation in economic growth in recent months.

The National Association of Realtors said on Friday existing home sales jumped a record 14.7 per cent to an annual rate of 5.46 million units, after being temporarily held back by the introduction of new mortgage disclosure rules, which had caused delays in the closing of contracts in November.

Sales were also boosted by unseasonably warm weather. November's sales pace was unrevised at 4.76 million units. Economists polled by Reuters had forecast home resales rebounding 8.9 per cent to a 5.20-million rate.

Sales rose 6.5 per cent to 5.26 million units in 2015, the strongest since 2006. Last month's snap-back suggests that November's slump was a blip and should offer some assurance that domestic demand remains fairly healthy, even as growth appears to have braked sharply at the end of 2015 because of a downturn in manufacturing and mining activity.

"While the carryover of November's delayed transactions into December contributed to the sharp increase, the overall pace taken together indicates sales these last two months maintained the healthy level of activity seen in most of 2015," said Lawrence Yun, NAR chief economist.

Housing is being supported by a strengthening labour market, which has resulted in an acceleration in household formation. Sales, however, remain constrained by a dearth of homes available for sale, which is limiting choice for buyers.

The economy has been hammered by a strong dollar, slowing global demand and deep spending cuts in the energy sector. Businesses are also placing fewer orders with factories while trying to reduce piles of unsold merchandise, which also is putting pressure on the economy.

REUTERS