US New Home sales end 2016 on a weak note - Wells Fargo

Analysts from Wells Fargo, point out that US new home sales in December falter amid higher mortgage rates.

Key Quotes: 

“New home sales ended 2016 on a weak note, as a spike in mortgage rates and the return of winter weather likely deterred some potential homebuyers. Despite the drop, new home sales rose a solid 12.2 percent in 2016.”

“New home sales fell 10.4 percent in December to a 536,000 unit annual pace, as a 40 basis point rise in mortgage rates and the return of winter weather cooled off sales.”

“This report is our first chance to assess the impact of higher interest rates. Existing home sales, reported earlier this week, measure closings and reflect mortgage rates from sales contracts signed a month or two earlier.”

“We expect home sales to rise slowly in the first half of 2017 as consumers adjust to higher interest rates and look for continued improvement in sales over the course of the year.”