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Brian Wesbury
Chief Economist
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Bob Stein
Deputy Chief Economist
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| New single-family home sales were unchanged in August |
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Implications: Today's report on new home sales remained sluggish and came in below consensus expectations. Part of this is due to the expiration of the homebuyer tax credit, which required buyers to sign a contract by the end of April, moving future sales forward. As a result, new home sales, which are counted at contract, increased to a 414,000 annual pace in April. Since then (May thru August), sales have averaged only a 293,000 annual pace. But there is likely more going on than just the credit. Typically, new home sales comprise 15% of all sales; lately, they've been less than 7%. Many people who would otherwise be in the market for a new home can get a similar existing home that was built in the past decade, due to heavy foreclosures and short-sales. Given a growing population, new home sales should increase over the next several years to roughly 950,000. But excess inventories of existing homes are slowing that process.
Click here to view the entire report.
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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.
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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.
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