Washington: Sales of new single-family homes fell unexpectedly to their slowest pace in nearly two years last month, pointing to deepening weakness in the American housing market, the government reported Wednesday.
While the hurricane-hit South saw a small sales dip, the double-digit nationwide drop marked the fourth straight monthly decline amid rising mortgage rates.
Sales for July and August, prime summer buying months, also were revised downward from the initial reports.
While home prices eased, the slowing pace of sales and rising inventories pushed supplies to the highest level since 2011.
The figures are subject to substantial revisions but economists say the housing sector can provide an early sign of a peaking economic cycle — meaning the slump could weigh on GDP growth in the third quarter.
Sales of new single-family homes fell 5.5 percent in September to a seasonally-adjusted annual rate of 553,000 units, according the Commerce Department report, a 13.2 percent decline from the same month of 2017.
Analysts had expected a far-stronger rate of 625,000 units.
With 327,000 new homes on the market at the end of the month, the most since 2009, inventories amounted to a supply of 7.1 months, the highest since March 2011.
Sales plunged 12 percent in the West and fell only a modest 1.5 percent in the South, the largest region by volume which was expected to see a bigger impact from Hurricane Florence. Meanwhile the Midwest posted a small sales increase.
Rising inventories and cooling prices could ease pressures on would-be homebuyers, who in recent months have been squeezed for affordability and choice in what the ever-tightening market and sluggish construction.
Despite the disappointing figures, Oxford Economics said new home sales account for only a small share of GDP, through broker commissions, so third-quarter economic growth was not likely to see a substantial hit as a result.
The Commerce Department on Friday is due to announce the first estimate of growth in the July-September period.
[source_without_link]AFP[/source_without_link]