Markets saw a temporary boost into positive territory before pulling back lower as new home sales climbed 11% for the largest gain in nearly a decade while the previous month saw a revision from a decline of six-tenths of a percent to a gain of 2.4%. Economists had expected a small rise of three percent as the housing sector sees recovery amid near record-low mortgage rates. Dwelling deeper into the release, sales increased in three of the four regions, while the south saw a decline for the second month. Also of note, seasonally adjusted supply fell to 8.8 months, its lowest level since October 2007. Meanwhile, total supply plunged to the lowest level since February 1999. The figure remains well above the roughly four month supply seen in the late 90s and years prior to the formation of the housing bubble. While such statistics may allude to recovery, there was mixed signs in the report as prices came in lower with average selling price slightly off while median price plunged from $219,000 to $206,200. Housing recovery remains vital to stability in financial firms although weakness in prices could result in more homeowners defaulting as mortgage values exceed the cost of the purchased house. Reaction proved abrupt and temporary in equities, although homebuilder stocks are trading higher across the board. Currencies, meanwhile, show investor concern that the market rally may end as the dollar strengthens across major crosses.
[B]New Home Sales Monthly Supply Relative to Sales[/B]
