New Home Sales Rise, Stocks Move Closer To Session Highs
- New Home Sales exceeded analyst expectations.
- The pullback in mortgage rates provided support to the housing market.
- U.S. stocks gained ground after the release of the report.
New Home Sales Grew By 2.3% In December
On January 26, U.S. released New Home Sales report for December. The report indicated that New Home Sales increased by 2.3% month-over-month, compared to analyst consensus of -2%.
Analysts expected that New Home Sales would decline due to high mortgage rates. However, it looks that the recent decline in rates provided material support to buying activity.
The report showed that the situation in the housing market has stabilized. It will be interesting to see whether tomorrow’s Pending Home Sales report, which is projected to show that Pending Home Sales declined by 0.9% month-over-month in December, will show a similar picture.
Stocks Move Higher After New Home Sales Data
S&P 500 gained ground after the release of the New Home Sales report. The housing market is a very important catalyst for the whole economy, so rising New Home Sales is a bullish sign. Traders are not worried that Fed may become more aggressive if the housing market recovers after the pullback.
The U.S. Dollar Index continued its attempts to get to the test of the 102 level. The U.S. dollar is trading near multi-month lows, and it looks that some traders are ready to bet on a rebound.
Housing market data had no impact on gold market dynamics. Gold settled near the $1930 level after the recent unsuccessful attempt to climb above the resistance at the $1950 level. Stronger dollar serves as a bearish catalyst for gold markets today.
For a look at all of today’s economic events, check out our economic calendar.