US home sales rebound strongly in June, inventory at 42-yr low

Written by Reuters | Washington | Updated: Jul 29 2010, 04:29am hrs
Sales of new US single-family homes rebounded strongly in June from the prior months record low, pushing the number of houses on the market to the lowest level in nearly 42 years.

But downward revisions to sales estimates for April and May contained in the report on Monday left in place a picture of a weak housing market and perceptions that economic growth moderated somewhat in the second quarter.

New home sales vaulted 23.6% to a 3,30,000 unit annual rate, the commerce department said. Still, the sales pace last month was the second lowest since records started in 1963.

We cant take too much joy in one months figure. The roadblocks to a healthy housing market are high, the most important one being the still-high jobless rate, said Jennifer Lee, senior economist at BMO Capital Markets in Toronto.

The percentage increase last month was the largest since May 1980, and it partially unwound Mays historic 36.7% drop. Analysts polled by Reuters had forecast new home sales rising to a 320,000 unit pace last month from Mays previously reported 300,000 units. The report, together with package delivery and business services company FedEx Corps upgrading of its quarterly and full-year earnings forecasts, lifted stocks on Wall Street.

FedEx, regarded as an economic bellwether, said more packages were flowing through both its air and ground networks. Prices for safe-haven US government debt slipped, while the dollar pulled back from session lows against the yen.Recent data have implied the US economys recovery from its longest and deepest recession since the 1930s slowed in recent months, but economists do not expect a renewed downturn.

Global economy still needs support, says US treasury

Nations must not pull back too quickly on economic stimulus because the global recovery still needs support, a top US treasury department official said on Monday.

The pace of exit strategy has to be carefully calibrated. We have to be careful not to have an overly accelerated withdrawal, treasury under secretary Lael Brainard said. Weighing in on a topic that has exposed differences between the United States and Europe, Brainard said that differences in the speed at which countries shifted from stimulus to restraint shouldnt overshadow the broad consensus that existed on fiscal policy. Spending to combat the 2007-2009 financial crisis and prop up teetering economies has left large piles of government debt around the world.