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01-28-20 | Economic News

New Home Sales Finish Ahead of 2018

Slight Dip in December Though

A monthly drop to finish the year is being described as "surprising" since a lot of the housing data has been so strong of late.

Expectations for the latest monthly report on new home sales were positive due to early reports on resales and regional sales but when the final tally came in for December, those expectations were dashed as sales actually dropped a little; -0.4%. On top of that, the prior month's total was revised downward.

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Regionally, sales of new homes took the biggest hit in the South, which recorded a 15.4% monthly loss. The Northeast followed that with an 11.8% fall. These declines ultimately could not be not be offset by a huge gain in the West (+31.0%) and a decent gain in the Midwest (+10.1%).

In spite of the monthly loss, new home sales in 2019 were 10.3% above 2018's amount. The Wells Fargo Economics Group states that though revisions to this preliminary data will lessen the gains, "2019 was certainly a strong year."

"With mortgage rates low and builder optimism rising, we expect sales to be solid again in 2020," the data analytics team reasons, then cautions, "Inventories are low, however, which will exert upward pressure on prices."

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