Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  New Single-Family Home Sales Declined 11.5% in September
Posted Under: Data Watch • Home Starts • Housing
Supporting Image for Blog Post

 
Implications: After surging in August, new home sales took a breather in September, as higher prices may be making some buyers uneasy. Sales declined 11.5% in September to a 468,000 annual rate, well below the forecast of every economics group, but are still up 2% in the past year. The important thing to remember when looking at today's report is that monthly data are volatile and what really matters is the trend. Even with September's large drop, new home sales over the past year have averaged the fastest pace going back to 2008. Largely as a result of the drop in sales, the months' supply of homes for sale grew to 5.8 months in September from 4.9 in August. However, the inventory of new homes for sale also rose as well, by 9,000 units. In other words, higher prices are incentivizing homebuilders to construct more homes, just like you'd expect in a free market. This should have two benefits. First, it will address the issue of thin supply, which should help boost sales in the year ahead. Second, larger inventories should help dampen price gains. New home sales are still depressed relative to history. We think there are a few reasons for this. First, a larger share of the population is renting. Second, buyers have shifted slightly from single-family homes, which are counted in the new home sales data, to multi-family homes (think condos in cities), which are not counted in this report. Third, although we are seeing a thaw, financing is still more difficult than it has been in the past. The trend is what matters, though, and the trend in sales has been up and should stay that way in the year ahead.

Click here for PDF version
Posted on Monday, October 26, 2015 @ 11:55 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.