US new home sales rebound

WASHINGTON: New U.S. single-family home sales rose less than expected in January, likely hurt by flooding in California, but continued to point to a strengthening housing market despite higher prices and mortgage rates.

Other data on Friday showed a dip in consumer sentiment this month, though it remained at a level consistent with a healthy pace of consumer spending. The Commerce Department said new home sales increased 3.7 percent to a seasonally adjusted annual rate of 555,000 units last month.

Economists had forecast single-family home sales, which account for about 9 percent of overall home sales, surging 6.3 percent to a 570,000-unit rate last month. New home sales, which are derived from building permits, are volatile on a month-to-month basis and subject to large revisions.  Sales were up 5.5 percent compared to January 2016.Data this week showed sales of previously owned homes jumped 3.3 percent in January to a 10-year high.  House prices increased 6.2 percent in December from a year ago.

In a separate report on Friday, the University of Michigan said its consumer sentiment index fell to a reading of 96.3 this month from 98.5 in January. The index had surged in the prior three months following Donald Trump´s victory in the Nov. 8 presidential election.

"Normally, the implication would be that consumers expected Trump´s election to have a positive economic impact," the University of Michigan said. "That is not the case since the gain represents the result of an unprecedented partisan divergence, with Democrats expecting recession and Republicans expecting robust growth."

The University of Michigan said February´s consumer sentiment reading suggested a 2.7 percent annualized growth pace in consumer spending this year. Prices of U.S. government debt edged up after the data. U.S. stocks were trading lower as was the dollar against a basket of currencies.