U.S. purchases of new homes declined more than projected lastmonth and were revised down in the prior period, showing the marketreturned to a less exuberant pace as the year drew to a close,according to government data Thursday.

Highlights of New-Home Sales (December)

Single-family home sales fell 9.3% m/m, the most since Aug.2016, to 625k annualized pace (est. 675k) after 689k rate (revisedfrom 733k) Median sales price increased 2.6% y/y to $335,400 Supplyof homes at current sales rate rose to 5.7 months from 4.9 months;295,000 new houses were on market at end of December Purchasestotaled 608k in 2017, up from 561k a year earlier

Key Takeaways

The strongest annual sales in a decade reflect an improvement infundamentals including robust job growth, historically low mortgage rates and a boost in home-equityvalues.

Steady growth in housing demand, December’s declinenotwithstanding, indicate new residential construction will remainfirm into the spring selling season.

New-home sales, tabulated when contracts get signed, account forabout 10% of the market. They’re considered a timelier barometerthan purchases of previously owned homes, which are calculated whencontracts close and are reported by the National Association ofRealtors.

Other Details

Purchases fell in all four U.S. regions, led by a 10% drop inthe Midwest and a 9.8 percent slide in the South CommerceDepartment said there was 90% confidence that the change in saleslast month ranged from a 20.3% decrease to a 1.7% increase,underscoring the volatility of the data Report released jointly bythe Census Bureau and Department of Housing and Urban Developmentin Washington.