New U.S. single-family home sales rose at their fastest pace in five months in September, a government report showed on Wednesday, but sustained price declines indicated the housing market is far from recovery.
RUDY NARVAS, SENIOR ECONOMIST, SOCIETE GENERALE, NEW YORK:
It was much better than expected and most of the gains were really in the south and the west. Given where we are in the housing market any better than expected number is a good number. At the same time it is not going to change the outlook on anything. There are a couple of positive signs with the months supply declining, and that trend continues.
As far as new homes hitting the market, as far as construction goes, what we are seeing in the housing market is really a shift from home ownership to home rentals.
DAVID SLOAN, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS
September new home sales with a 5.7% increase to 313k exceeded a consensus expectation of 300k and were the highest since April. Sales are going to have to pick up a lot more than this to have a significant effect on overall economic growth but there is some tentative evidence emerging that falling mortgage rates are providing some support to the housing market, with the NAHB homebuilders survey providing hope for October. Falling new home prices however show that the market remains soft.
ROGER VOLZ, DIRECTOR OF CASH EQUITIES AT BGC FINANCIAL IN NEW YORK
Durable goods was a big lift this morning but home sales are a little muted. This is more of an on-again, off-again data point, so it doesn't have as big of an impact on equities. We're now just waiting for further headlines to come out of Europe. We're in a waiting game.
JACOB OUBINA, SENIOR ECONOMIST, RBC CAPITAL MARKETS, NEW YORK
The number's a little bit better than expected but we have to put this number into context. It's a far cry from the high 1.4 million that existed during the peak of the real estate boom.
We don't expect this sector to rebound any time soon. And this 'better' number comes in on the back of more price declines.
STOCKS: U.S. stocks hold earlier gains.
BONDS: U.S. bond prices hold earlier losses.
FOREX: The dollar remained little changed versus the euro and yen.