New US home sales spike 18.9%, hit 10-year high in September

Sales of new US single-family homes unexpectedly rose in September, hitting their highest level in nearly 10 years, offering hope that the housing market was regaining speed after appearing to stall recent months.

The Commerce Department said on Wednesday new home sales surged 18.9 per cent to a seasonally adjusted annual rate of 667,000 units last month amid an increase in all four regions. That was the highest level since October 2007 and followed August's upwardly revised sales pace of 561,000 units.

The percent gain was the largest since January 1992. August's sales pace was previously reported at 560,000 units.

Economists polled by Reuters had forecast new home sales, which account for 11 per cent of overall home sales, falling 0.9 per cent to a pace of 555,000 units last month.

New home sales, which are drawn from permits, are volatile on a month-to-month basis. Sales soared 17.0 per cent on a year-on-year basis in September. The housing market has trod water for much of this year, amid shortages of homes available for sale, skilled labour and suitable land for building.

Activity was also hampered by Hurricanes Harvey and Irma, which weighed on homebuilding in September and hurt sales of previously owned homes in the South. Housing is expected to have been a drag on economic growth in the third quarter.
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