US New Home Sales Plunge To A 17 Year Low, Dollar Traders Are Numb To The Data

Daily Forex Fundamentals | Written by DailyFX | Sep 25 08 14:41 GMT |

With the US housing market already deep into its worst recession in generations, it seems new lows in sales activity is generating less and less of a reaction from the dollar. Indeed, traders seem to have priced in an indefinite decline in this battered component of growth, as a massive 11.5 percent drop in new home sales to a fresh 17-year low would only set the currency back for a few minutes. However, while the market's response was muted, the data itself was certainly disappointing. The contraction was the biggest since last November's record, leading the annualized pace of sales to a 460,000 pace - a dramatic shift from the 1.04 million clip reported just two years ago. On the other hand, the components of the Commerce Department report suggest the necessary changes are being made to eventually recharge the market when demand is found. Homes for sale fell for yet another month to 408,000 (from 427,000 last month) as construction activity cools and inventory is worked off. More important to meeting an equilibrium for demand, the average preice fell yet again to $221,900. While next month's reading will almost certainly be depressed by the recent financial crisis, the market looks as if it may improve further out - that is if consumers aren't put into a worse position by a recession. DailyFX Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.