There were concerns over a recovery in the US housing market today after the Commerce Department revealed a fall in sales of new homes for the month of November.
According to the Commerce Department, new single-family home sales dived by 11.3% to a seasonally adjusted annual rate of 355,000 units, down from a revised 400,000 in the previous month and represented the biggest fall since January.
The US housing market has been showing signs of stability of late, in particular, due to Government incentives including lower mortgage rates and the first-time buyer tax credit.
However, economists attributed the fall to the extension of the tax credit, which had been due to end on November 30.
Paul Dales, US economist at Capital Economics, said: “The drop in new homes sales is the start of the fallback in demand after the first round of the tax credit expired.”
The figures were not well received by Wall Street and the main Dow Jones index fell from an early peak of 10,490 points to 10,446, a fall of 0.2% on the day.
In related news, the Commerce Department yesterday revealed that the US economy grew at a slower rate in the third quarter than previous estimates showed.
According to the figures, the US economy grew by 2.2% between the July and September period, rather than the 2.8% previously reported and the original estimate of 3.5%.
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