Another Sign Housing Slump May Be at End

Sales of new homes in America rose more than forecast last month, another sign that the worst of the housing slump may be over.The 3.4% increase to an annual sales pace of 1.047 million followed a rate of 1.013 million the prior month, the Commerce Department said today in Washington. Economists had predicted a gain of 1.6%. The supply of unsold homes at the current sales rate fell to the lowest since May.Today’s figures, along with the jump in housing starts reported last week, suggest the industry downturn that helped slow economic growth this year might not have the same impact in 2007. The year-on-year increase in median house prices last month was the most in five months.“We might not be at the bottom, but we’re getting very close to it,” an economist at Wachovia Corp., Jason Schenker, said.Still, the number of unsold dwellings — including homes not started, under construction and completed — remains near a record. A separate report today from the Mortgage Bankers Association showed mortgage applications declined last week.Economists had expected sales to rise to a 1.018 million rate in November from a previously reported 1.004 million, according to the median of estimates in a Bloomberg News survey.The Standard & Poor’s Supercomposite Homebuilding Index climbed 1.9% to 699.31. The S&P 500 index rose 0.8%. The yield on the benchmark 10-year Treasury note reached a six-week high, jumping 5 basis points to 4.65%.The median price of a new home rose 5.8% in November to $251,700 from $237,900 a year earlier, yesterday’s report showed. It was the biggest year-over-year increase since June.The number of homes for sale fell to a seasonally adjusted 545,000 during the month from 558,000 the prior month. A record 573,000 homes were on the market in July. The supply of homes at the current sales rate dropped to 6.3 months’ worth from 6.7 months’ worth in October.The number of homes completed and waiting to be sold rose 51% to a record 169,000 in November from the same month last year. Sales of new homes were down 15% in November from the same month last year.“It looks like we’ve stabilized” in sales, chief economist at Informa Global Markets, Kevin Harris, said. At the same time, he said the record number of homes completed and waiting to be sold, was “from a micro, business point of view very important to the builders.”Mr. Harris said housing data in the final months of the year were frequently skewed by seasonal adjustments. “I’m not sure we saw a much better month” because the end-of-year data is “too messed up to know that,” he said.Sales increased 22.5% in the Northeast to a 49,000 annual rate.

Another Sign Housing Slump May Be at End

Another Sign Housing Slump May Be at End

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