U.S. existing home sales drop in December

U.S. existing home sales fall in December after rising in the prior month. Sales dropped 6.4 percent to 5 million units. The outturn was below consensus expectations which called for a 1.5 percent fall. The fall was widespread in both market segments. Single-family and condo/co-op sales dropped 5.5 percent and 12.9 percent respectively on the month. On a year-on-year basis, sales dropped 3.5 percent on average – the softest rate since 2015.

Home re-sales fell throughout all four regions, driven by a 11.2 percent fall in the Midwest and a 6.8 percent fall in the Northeast. Sales in the South and West also dropped 5.4 percent and 1.9 percent, respectively. The number of homes available for sale dropped to a seasonally unadjusted 1.55 million units from 1.74 million in November, which at the current sales rate, puts supply at just 3.7 months. Median existing home prices rose 2.9 percent year-on-year, a marked slowdown from November’s 4.1 percent outturn.

The headline figures came in below expectations and possibly reflected many headwinds that have been facing the housing market, noted TD Economics in a research report.

“Given expectations for a more gradual pace of rate increase from the Federal Reserve, interest rate movements should represent less of a headwind to home purchases in 2019 and with unmet demand, particularly at lower price points, this could stimulate more housing construction and economic activity this year”, added TD Economics.

At 18:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at 10.1915 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex