US government figures show that sales of new family homes unexpectedly fell to their lowest level in seven months in November, dealing a blow to the US housing market's recovery.
Earlier figures on consumer spending had painted a brighter economic picture, with a 0.5% increase recorded in November.
The Commerce Department said new home sales dropped 11.3% in the month, the biggest decline since January, to a 355,000 unit annual rate, from a downwardly revised 400,000 units in October. Analysts had expected an increase.
The data are a setback for the housing market which has been showing signs of stabilising after a three-year slump. An industry survey on Tuesday showed that sales of previously owned home surged to their highest level in nearly three years last month.
There were some positive signs, however, in the November new home sales report. The median sale price for a new home rose 3.8% from October to $217,400, the highest level since May.
Steady rise in US spending last month
Separate Commerce Department figures showed that US consumer spending, a key growth driver, rose 0.5% in November, as the economy gained steam after a brutal recession.
The gain in personal consumption expenditures was lower than the revised 0.6% rise in October, according to the data. Most economists had expected a 0.7% jump in spending amid the year end shopping season.
Retailers had slashed prices to woo shoppers as the country reels from double digit unemployment even as the economy recovers from a recession that struck in December 2007.
The rise in household expenditures was led by goods spending which rose 1.4%, the data showed.
The report also said personal incomes grew 0.4% in November from 0.3% the month before while disposable income was unchanged at 0.5%.
The US economy grew at a 2.2% pace in the third quarter, according to revised government figures yesterday that suggested a tepid recovery from recession.
