U.S new home sales increase 7.9% in January despite the Coronavirus fears

By: Michael Harris
Michael Harris
Specialising in economics by academia, with a passion for financial trading, Michael Harris has been a regular contributor to… read more.
on Feb 26, 2020
Updated: Mar 11, 2020
  • U.S new home sales increase 7.9% in January despite the Coronavirus fears.
  • Home Depot announced better than expected quarterly performance results on Tuesday.
  • EUR/USD challenged the crucial 1.90 resistance again on Tuesday but failed to break above it.

Data from the U.S Census Bureau showed on Wednesday that new home sales in the U.S (single-family) noted a record high in over 12 years in January. According to the experts, the rising stability of the U.S housing market can help offset the Coronavirus driven hit to the economy. The optimism of the housing market, they added, will also help ensure that the longest economic expansion in the U.S history remains on track.

January’s Data Suggested 764,000 Units Sold Last Month

The Commerce Department reported a 7.9% increase in new home sales in January on Wednesday. At 764,000 units (seasonally adjusted annual rate) sold in January, sales were branded as the highest since July 2007. The revised data for December suggested a significantly lower 708,000 units sold in the previous month.

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The original figure for December that was reported earlier was capped at an even lower 694,000 units. In a previous estimate, analysts had forecast a 3.5% growth in the U.S new home sales to 710,000 units sold last month. New homes currently account for around 12.3% of the total sales in the U.S housing market.

The U.S new home sales are widely popular for volatility in the monthly reports. As compared to last year, January’s data accentuated an 18.6% increase in sales. Sales in the Midwest took the lead with a massive 30.3% gain to match the level that was last seen in October 2007. In the West, sales were reported 23.5% higher (last seen in July 2006) in January while a moderate 4.8% jump was noted in the Northeast. South, on the contrary, recorded a 4.4% decline as per Wednesday’s data. A significant chunk of the total transactions stems from this region.

Home Depot Revealed Better Than Expected Quarterly Performance Results On Tuesday

The U.S GDP is currently challenged due to the recent outbreak of Coronavirus in China that is rapidly spreading across borders and disrupting global business operations. As per the analysts, the housing may not have a gigantic contribution in the U.S GDP, its impact on the economy at large is significant. Home Depot is traditionally considered a reliable indicator that offers insight into the U.S households’ economic stability. On Tuesday, Home Depot announced its Q4 earnings report that suggested significantly stronger financial performance than expected.

The U.S new home sales report failed to stir optimism in the U.S dollar index. EUR/USD climbed from 1.0855 level on Wednesday to a high of 1.0898 around which it is currently settling.

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