U.S. new home sales rise above expectations in March, housing market to gain further in 2017

U.S. new home sales came in stronger than expectations in the month of March. Sales rose 5.8 percent on a sequential basis to 621,000. This is more than consensus expectations of 584,000. The figure for February was revised down slightly by 5000 to 587,000. The report for March brings the first quarter average to a strong 598,000, the highest reading since the fourth quarter of 2007. Region wise, sales were up in all regions except the Midwest, where new home sales dropped 4000.

New home sales have rebounded steadily since their sharp decline in December. The increase in sales led the months’ supply to drop to 5.2 from 5.4. Taking a wide variety of indicators into account, the housing market continues its stable rebound and is likely to gain further in 2017, according to a Barclays research report. Barclays first quarter GDP tracking estimate is at 0.8 percent quarter-on-quarter.

“We continue to track another strong increase in residential investment in Q1 17, driven by strong increases in both multifamily and single family construction, as well as a solid contribution from brokers' commissions given the steady rise in home sales”, added Barclays.