New home sales data in the United Sales were released today, much higher than expected, recording 323,000 in April versus the revised previous 301,000. Expectations were for an increase of only 5,000.
This results in a change of 7.3 percent which is lower than the previous revised 8.3 percent change.
Investors probably do not translate the data to mean that the housing market has picked up, but on the contrary. There is expectation that foreclosures will continue to drive down property values, which means that home buyers will prefer to buy existing homes rather than new homes, promoting stagnation in the construction industry.
Upon release of the news at 10 CET, the EURUSD briefly spiked around 7 pips from 1.4104 to 1.4113 then droped1.4098, only to continue rising to 1.4122 in the next 10 minutes.
The data is compiled by the US Census Bureau very month, and is an annualized figure that indicates the number of new single-family homes purchased during the prior month.