US new home sales rise by unexpected 3.3%

US new home sales rise by unexpected 3.3%


NEW YORK – SALES of new homes in the United States rose an unexpected 3.3 per cent last month from March, to a seasonally adjusted annual pace of 526,000, a Commerce Department report showed yesterday.

The spike in sales was unexpected, as most analysts had predicted that sales declined last month.


However, prices of single-family homes in the US plunged by a record 14.1 per cent in the first quarter from a year earlier, according to the Standard & Poor’s/Case Shiller national home price index.


The fall in quarterly prices marks a pace five times faster than during the last housing recession.


The S&P/Case Shiller composite index of 20 metropolitan areas fell 2.2 per cent in March from February and plummeted a record 14.4 per cent from March last year.


‘There are very few silver linings that one can see in the data,’ said Mr David Blitzer, chairman of S&P’s index committee.


Falling home prices have become the scourge of the housing market, which is suffering its worst downturn since the 1930s. Since last year, home values have been dropping below balances owed on many mortgages, leaving borrowers with no equity and more likely to succumb to foreclosure.


Elsewhere, US consumer confidence plunged unexpectedly to its lowest point in 16 years this month, as rising fuel costs and falling home prices made Americans nervous about the future.


The Conference Board, an industry group, said its monthly measure of consumers’ mood fell to 57.2 from 62.8 in April, well below Wall Street’s median estimate of 60.


The Dow Jones Industrial Average edged up 2.28 points to 12,481.91 in early trade.




Source: Straits Times

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