US new home sales fall to lowest rate in 12 years
SALES of new single-family homes in the United States fell much more than expected to an annual rate of 647,000 last month.
This is the slowest pace in more than 12 years, according to a government report yesterday.
New single-family home sales were 9 per cent lower from the downwardly revised pace of 711,000 in October, the Commerce Department said.
That was the worst showing since April 1995, when the pace of sales was 621,000.
The sales pace last month was much weaker than economists were expecting. They were predicting sales in the weakest sector of the economy to drop by around 1.8 per cent, to a pace of 715,000.
Analysts polled by Reuters were expecting a seasonally adjusted annual sales rate of 720,000.
Sales in the US Midwest were particularly weak, tumbling 27.6 per cent to the slowest pace since July 1991.
US stocks rebounded yesterday from the previous session's sell- off, with energy issues in the lead, as crude prices rose and financial counters gained on a report that banks are planning to sell assets to shore up capital.
After half an hour of trading, the Dow Jones Industrial Average was up 89.25 points, or 0.67 per cent, at 13,448.86.
The Nasdaq Composite Index rose 20.54 points, or 0.77 per cent, to 2,697.33.
Meanwhile, a measure of US business activity unexpectedly rose this month, as new orders increased.
The National Association of Purchasing Management-Chicago said yesterday that its business barometer rose to 56.6, from 52.9 last month. Figures greater than 50 signal growth.
Orders from overseas may help sustain growth in manufacturing even as US demand wanes, economists said. That would help the economy weather the housing recession and an expected slowdown in consumer spending.
'Demand has been quite strong in the fourth quarter, even though we assume producers are cutting back and trimming inventories,' Mr Michael Englund, chief economist at Action Economics in Boulder, Colorado, said before the report.
Economists had forecast that the index would fall to 51.7, according to a Bloomberg survey.
REUTERS, ASSOCIATED PRESS, BLOOMBERG NEWS
