Sales of new U.S. single-family homes fell more than expected in December, but lean inventories and steady price gains suggested the housing market recovery remained intact.
Economists largely shrugged off the second straight month of decline in sales, blaming frigid temperatures. Other data on Monday showed an acceleration in services sector growth in January, backing views of sustainable strength in the economy.
“It’s cold out there for the economy. The drop in new home sales is not a sign the economy at large is starting to slow in a worrisome manner,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.
The Commerce Department said new home sales fell 7.0 percent to a seasonally adjusted annual rate of 414,000 units. Sales were at a 445,000-unit pace in November and economists had expected them to slow to only a 457,000-unit rate in December.
Apart from the bitterly cold weather, last month’s decline in sales was likely a continuation of the payback after October’s outsized 14.9 percent increase. Sales in the Northeast, which was hard hit by cold temperatures, tumbled 36.4 percent to their slowest pace since June 2012.