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New Home Sales: Yet Another Month of Declines

March 23, 2018

Bottom Line: While January was revised higher, February sales were still lower than expected, led by declines in the West, where weather was not a factor in February. Nationwide sales over the last three months have averaged 631K and are 1.9% below the 6 month average of 643K, indicating a potential turn towards a slower trend in housing. The months' supply rose slightly as sales fell and inventories rose. New home prices continued to climb relative to their year ago levels.

New Home Sales FELL by 0.6% to 618k, after the prior month was revised higher to 622k. This compared with market expectations for an increase to 620k, from the unrevised January level of 593k. January was revised higher, though, to 622k.
Sales are now just 0.5% ABOVE their year ago level -- and they are still 55.5% BELOW their July 2005 peak.

The Inventory of Homes Available for Sale ROSE by 2.0% to 305k. Inventories are now 16.0% ABOVE their year ago level but still 46.7% BELOW their July 2006 peak level.

Combined with the decline in sales, the Months' Supply increased to 5.9 months from 5.8 months. This is just BELOW a normal level of 6.0 months but well BELOW its peak of 12.2 in January 2009.

Home Prices ROSE with median prices 9.7% ABOVE their year ago level and with average prices 1.7% ABOVE their year ago level.

Article by Contingent Macro Advisors