Commerce Department Downwardly Revises October Sales; November Sales Less Than Forecast
The Commerce Department last week downwardly revised the new home sales figure for October from 495,000 to 470,000 and reported November sales came in at 490,000, a 4.3 percent increase from the revised figure from the previous month. Economists had expected sales to come in at 505,000, Bloomberg News reported. The median price for a new home rose 0.8 percent from one year ago to $305,000. Reuters said that although the declining trend in recent months indicates the housing market is losing momentum, the increase in November should moderate concerns of an unexpectedly sharp slowdown. The AP reported that while the “housing market has strengthened for much of this year,” it has “noticeably cooled since September as purchases of new homes in the Northeast and Midwest have been uneven.”
What This Means For Small Businesses
The US housing market has been slow to recover from the recession. News that new home sales rose is positive, and this could in turn lead to general improvement in the US economy, particularly as other sectors continue to be weak drivers of growth. As NFIB Chief Economist William Dunkelberg pointed out in the latest Small Business Economic Trends report, “With weak expectations for sales and business conditions, prospects for strong inventory investment are poor.” He also cautioned that “Overall, the outlook remains about the same, slow 2 percent-ish growth, payroll employment growth averaging around 200,000 a month, 100,000 in the Household Survey (enough to keep the unemployment rate around 5 percent), not much pressure on prices from Main Street.”
The Wall Street Journal also covered new home sales data.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.