U.S. home sales rise below expectations in September, housing market’s underlying momentum remains strong

U.S. home sales rose below expectations in September. It rose 3.1 percent sequentially to 593,000 as compared with the consensus forecast of a rise to 602k. Meanwhile, the figure for August was downwardly revised to 575k from 609k. This takes the month-over-month decline in August to 8.6 percent from 7.6 percent.

But the average rate of sales continued to stay strong at 599k in the third quarter, the highest quarterly average since the fourth quarter of 2007. This implies that the underlying momentum in the housing market continues to stay strong, noted Barclays in a research note. Region wise, sales rebounded in all the areas except the West, which registered a drop of 4.5 percent sequentially, reversing some of earlier month’s gains.

The downward revisions to August data suggest subdued new home sales for the September quarter as a whole, and a tad lower brokers’ commissions. This reduced the Barclays residential investment tracking estimate slightly; however, it kept its third quarter GDP tracking estimate the same at 3 percent sequentially after rounding, stated Barclays.