New Home Sales: Increase Modestly
December 23, 2015
New Home Sales ROSE by 4.3% to 490k, after the prior month was revised modestly lower to 470k. This compared with market expectations for an increase to 505k, from the unrevised October level of 495k. While the trend is still rising and sales are now 9.1% ABOVE their year ago level, they are still a stunning 64.7% BELOW their July 2005 peak. The Inventory of Homes Available for Sale ROSE by 2.2% to 232k. Inventories are now 10.5% ABOVE their year ago level but still 59.4% BELOW their July 2006 peak level. Combined with the increase in sales, the Months' Supply dropped to 5.7 months from 5.8 months. This is modstly BELOW a "normal" level of 6.0 months and well BELOW its peak of 12.2 in January 2009. Home Prices ROSE with median prices 0.8% ABOVE their year ago level and with average prices 4.5% ABOVE their year ago level. Both median and average home prices have been increasing modestly over the past year. Bottom Line: New home sales rose modestly less than expected in November. Sales over the last three months have averaged 467K and are 2.6% below the 6 month average of 480K. The months supply dropped slightly as sales rose and inventories rose. New home prices continued to climb relative to their year ago levels. While existing home sales yesterday showed weakness, this new home sales data (based on contract signings rather than closings like existing home sales reports) reveals potential strength going forward.
Article by contingentmacro