Sales of new homes shot up 11.3 percent in November to the highest rate in more than seven years, the government said Thursday. Most of the gain came in the West.
New, single-family homes sold at a seasonally adjusted annual rate of 807,000, the highest level since April 1986, the departments of Commerce and Housing and Urban Development said.The November gain surprised economists, who were expecting an increase of 2 percent or 3 percent. It followed a revised 2.2 percent drop in October, previously reported as a 6.5 percent decline. Sales had soared 15.4 percent in September.
The West accounted for the bulk of the advance. Sales there skyrocketed 33.8 percent to a seasonally adjusted annual rate of 273,000, the highest level since March 1979.
They rose 6.2 percent in the South to a rate of 327,000 units and 0.7 percent in the Midwest to 154,000 units, the highest in 22 months. Sales fell 10.2 percent in the Northeast.
Economists say home sales are part of a fourth-quarter revival they expect to produce the strongest growth of the year. Builders are stepping up construction and buyers are purchasing furniture and appliances to put in their homes.
In another report today, the Labor Department said the number of Americans filing for unemployment benefits plummeted by 39,000 last week to a seasonally adjusted 291,000, the lowest level in nearly five years.
Analysts cautioned that part of the big drop probably could be attributed to the fact that most government offices closed the day before Christmas, leaving few days to file claims.
The trend in new home sales reported by the government roughly parallels a resurgence of sales of existing homes, reported by the National Association of Realtors.
The group said sales of existing homes rose 2.9 percent to a seasonally adjusted rate of 4.21 million units, the highest level ever recorded. That broke a record that has stood for 15 years.
The advances in sales in both new and existing homes came as buyers rushed to take advantage of low mortgage rates. The average rate on 30-year mortgages edged up from a 25-year low of 6.83 percent in October to 7.16 percent in November and some buyers apparently decided to purchase homes fearing rates would rise further.
For the first 11 months of 1993, new home sales total 619,000, up 9 percent from the same period of 1992.
The seasonally adjusted estimate of new homes for sales at the end of November was 301,000, representing a 4.7-month supply at the current sales pace and the lowest figure since April 1986.
The median price of a new home in November was $130,000, up 0.9 percent from last year and matching the record set in April 1990.
The advances in sales in both new and existing homes came as buyers rushed to take advantage of low mortgage rates. The average rate on 30-year mortgages edged up from a 25-year low of 6.83 percent in October to 7.16 percent in November and some buyers apparently decided to purchase homes fearing rates would rise further.
For the first 11 months of 1993, new home sales total 619,000, up 9 percent from the same period of 1992.
The seasonally adjusted estimate of new homes for sales at the end of November was 301,000, representing a 4.7-month supply at the current sales pace and the lowest figure since April 1986.
The median price of a new home in November was $130,000, up 0.9 percent from last year and matching the record set in April 1990.