New Home Sales Rise More than Expected

New Home Sales measures the number of new single-family homes that were sold during the prior month; this report is somewhat strongly correlated to Existing Home Sales. The Survey states that 321 thousand new single-family homes were sold in January. This is lower/higher than the 315 thousand expected by analysts. This is essentially bullish/bearish for the U.S. housing market. From the report, sales of new single-family houses in January 2012 were at a seasonally adjusted annual rate of 321,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.9 percent below the revised December rate of 324,000, but is 3.5 percent above the January 2011 estimate of 310,000. The median sales price of new houses sold in January 2012 was $217,100; the average sales price was $261,600. The seasonally adjusted estimate of new houses for sale at the end of January was 151,000. This represents a supply of 5.6 months at the current sales rate. An increase in new homes sold implies a healthy housing market, and because of the multiplier effect, housing has an impact on the rest of the economy. Increases in homes sold suggest increased household income and in turn an economic expansion, and visa versa.