U.S. New Home Sales Jump To Six-Year High In December

(RTTNews) - After reporting an unexpected drop in sales of new single-family houses in the previous month, the Commerce Department released a report on Tuesday showing that U.S. new home sales rebounded by more than anticipated in the month of December.

The Commerce Department said new home sales jumped 11.6 percent to an annual rate of 481,000 in December from the revised November rate of 431,000.

Economists had expected new home sales to climb to a rate of 452,000 from the 438,000 originally reported for the previous month.

With the bigger than expected increase, new home sales rose to their highest annual rate since reaching 487,000 in June of 2008.

Peter Boockvar, managing director at the Lindsey Group, said, "It's encouraging to see a pickup in home sales as builders respond to the lack of inventory with existing homes. But, at 481k, sales remain 200k below the average seen since 1980 with of course a much bigger U.S. population today."

"We've got a long way to go and plenty of room for more building but this stat alone also highlights the damage the popped housing bubble wrought," he added.

The jump in new home sales was partly due to strength in the Northeast, where new home sales soared 53.6 percent to 43,000 in December.

New home sales in the South also surged up 17.7 percent to 253,000, while sales in the West rose 3.1 percent to 131,000.

On the other hand, the Commerce Department said new home sales in the Midwest tumbled 11.5 percent to 54,000.

The report also showed that the median sales price of new houses sold in December was $298,100, up 2.2 percent from $291,600 in November and up 8.2 percent from $275,500 a year ago.

The estimate of new houses for sale at the end of December was 219,000, representing 5.5 months of supply at the current sales rate compared to 6.0 months in December.

Additionally, the Commerce Department said an estimated 435,000 new homes were sold in 2014, representing a 1.2 percent increase from 429,000 in 2013.