New York: 07:42 || London: 12:42 || Mumbai: 18:12 || Singapore: 20:42

Reports US

US stock market daily report (February 26, 2014, Wednesday)

February 27, 2014, Thursday, 05:59 GMT | 00:59 EST | 11:29 IST | 13:59 SGT
Contributed by Millennium Traders

Commerce Department reported January sales of new U.S. single-family homes rose to a 5 year high not seen since July 2008, surging higher by 9.6%, to a seasonally adjusted annual rate of 468,000 units. The report provides a sign of surprising strength for the housing market. Commerce revised new home sales in December to a 427,000 unit pace from previously reported 414,000 unit rate.

Typically, this time of year can see choppy sales due to snowstorms and colder temperatures which keep potential buyers from venturing out, to look at a new home. Construction sites also see a slow down as winter weather keeps workers off job sites.

New home sales in the Northeast soared 73.7% to a seven-month high, the South recorded a 10.4% rise in new home sales to a high of over five-years, the West saw an increase in new home sales by 11% and new home sales in the Midwest fell 17.2%. The rise is surprising in light of the increase of mortgage rates during 2013, into 2014 along with tepid income growth. Many potential home owners are finding new homes, less affordable due to the recent slow down in job growth.

Lending standards remain relatively high although, some banks are working toward making it easier to obtain a mortgage amidst new mortgage rules. Potential buyers could be under pressure to make a move now on a new home, in an effort to beat the ever rising mortgage rates.

Median new home price during January rose 3.4% to $260,100 from January 2013. Supply of new homes on the market during January remained unchanged at 184,000 units. To clear the supply of new homes on the market, based on sales pace for January, it would take 4.7 months.