While consumer shopping contributed to a second straight monthly increase in November, the purchases don’t reflect new home shopping. While holiday shopping fueled the two-month increase in consumer spending, it’s not enough to power or even signal strong economic recovery.
Despite the bleak job market, those who are fortunate enough to do so are paying down debts on concerns of the future and whether or not their employment blessings will last through the next year. On the other hand, that same job insecurity is keeping people from signing mortgage papers.
November marked an 11 percent decrease in new home sales from October, signaling that consumers aren’t jumping at the first-time buyers’ extension Congress originally set for November, which is now pushed back to April 30 and includes current homeowners who move.
Economists use new home sales as the barometer of future real estate activity – while Midwest region sales rose 21 percent, they fell 21 percent in the South, 9 percent in the West, and 3 percent in the Northeast, leading economists to anticipate a decline for the winter months.
Though the numbers and trends hint at declines in the upcoming months, overall the housing market has managed to shake off some of the dust from its massive bust as signs of federal assistance benefits begin to show.
According to the Commerce Department, new home sales hit a seasonally adjusted annual rate of 355,000 last month, off from a downwardly revised 400,000 pace in October. Economists surveyed by Thomson Reuters had expected 440,000.