U.S. new home sales rise sharply in September

The U.S. new home sales surged in September unexpectedly. The new home sales rose 18.9 percent sequentially to 667,000, coming in well above expectations. Also, modest revisions to the upside were made to previous month’s data, taking the net revision to 8,000. Region wise, gains were broad based.

Sales in the South, which was worst impacted by the hurricanes, rose strongly by 25.8 percent. The Northeast also recorded a strong rise of 33.3 percent. The sales of new homes were expected to remain muted in September, given the landfall of two other hurricanes near the early part of the month, noted Barclays in a research report. But that does not appear to be the case, with sales at the highest level since November 2007. Meanwhile, months’ supply of new homes dropped to 5, while the average price of new homes rose 5.7 percent sequentially.

“Today's stronger-than-expected sales data, coupled with upward revisions to data for July and August, imply higher brokers’ commissions and single-family construction than we had previously penciled in”, added Barclays.

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