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Housing data releases are important economic indicators
Besides indicating an increase or decrease in housing activity, housing data releases also give guidance across other segments of the economy, especially to construction and home furnishing companies. As buying a home is a large investment, these are some of the strongest consumer confidence indicators. Since consumption comprises over 70% of the economy, an improvement in these indicators will imply that the overall economy is improving.
New home sales
New Residential Sales data for January 2014 will be released on Wednesday, February 26, 2014 by the U.S. Department of Commerce, Census Bureau.
What are new home sales?
This indicator records the sale of newly constructed homes within the U.S. The headline number is “New Home Sales” which is issued on a seasonally adjusted annual rate (or SAAR) basis. The SAAR is the seasonally adjusted monthly value times 12. The benefit of the annual rate is that not only can one monthly estimate be compared with another but that monthly data can also be compared with an annual total. The seasonally adjusted annual rate is neither a forecast nor a projection; rather it’s a description of the rate of building permits, housing starts, housing completions, or new home sales in the particular month for which they are calculated.
What did December’s reading indicate?
New home sales for December 2013 clocked in at a SAAR of 414,000, down 7% from November, but up 4.5% year-on-year. The decline was attributed partly to the double-digit spike in the indicator in October, colder weather, and increase in mortgage rates. The median sales price for new houses sold in December 2013 came in at $270,200 with the average sales price at $311,400. The seasonally adjusted estimate of new houses for sale at the end of December was 171,000 or a supply of 5.0 months at the current selling pace. New home sales were estimated at 428,000 in 2013, up 6.4% over 368,000 in 2012.
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