From the WSJ:
New home sales posted a steep decline in December, an indication that affordability challenges are beginning to cut into demand.
Purchases of newly built, single-family houses, which account for a small share of overall U.S. home sales, decreased 10.4% from November to a seasonally adjusted annual rate of 536,000 last month, the Commerce Department said Thursday.
That was the slowest monthly sales pace since February and the steepest one-month drop since March 2015.
Economists surveyed by The Wall Street Journal expected new home sales to decline 1.5%, to 583,000 sales.
The drop “was a shocker,” said David Berson, chief economist at Nationwide Insurance. He said home sales are often volatile in the winter months because of weather, however, and he still expects new-home sales to rise in 2017.
Data on new-home sales generally can be imprecise from month to month. December’s 10.4% sales decrease came with a margin of error of 12 percentage points.
In all, an estimated 563,000 new homes were sold in 2016, up 12.2% from a year earlier and the fifth straight year of sales growth. The annual figure indicates broad improvement in the market, even if sales of new homes remain well below where they were during the housing boom of the 2000s, when they topped 1 million a year for four years running.
“Home buyers are facing headwinds from higher mortgage rates and uncertainty about tax policy, but low existing inventory, near full employment, and rising wages are tailwinds that will continue to push new home sales higher in the year ahead,” Mr. McLaughlin said.