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 6.8% in June
Posted Under: Data Watch • Home Sales • Housing
Supporting Image for Blog Post

 
Implications: Hold off on housing for a moment. Initial claims for unemployment insurance fell 26,000 last week to 255,000, the lowest level since 1973. This, paired with a decline in continuing claims to the second lowest level since November 2000, signals continued improvement in the labor market and is consistent with payroll gains of 225K in July. Sales of new homes took a breather in June, falling 6.8% to a 482,000 annual rate, lagging even the most pessimistic forecasts. However, sales remain up 18.1% from a year ago. It's important to remember that monthly data is volatile, and what really matters is the trend. Despite the decline in June, new home sales over the past year have averaged the fastest pace going back to 2008. And new home sales have a strong correlation with housing starts, which are also trending higher. In fact, new home sales have been running slightly above the levels that would be expected with the pace of housing starts, so June's decline is likely nothing more than a reversion to the trend and sales should continue higher in the months ahead. While the month's supply of homes for sale rose to 5.4 months in June from 4.8 in May, the jump was in large part due to the slower sales pace and remains below the average of 5.6 over the past 20 years. Note, however, that the increase in inventories was not due to finished homes, but homes under construction or not yet started. As a result, builders still have plenty of room to increase both construction and inventories. Having made these points, don't forget that 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 may be starting to see a thaw, financing is still more difficult than it has been in the past. The key idea to remember is that one poor month of sales is nothing to worry about. The trend is what matters, and the trend continues higher.

Click here for PDF version
Posted on Friday, July 24, 2015 @ 12:17 PM • 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.
Search Posts
 PREVIOUS POSTS
Existing Home Sales Increased 3.2% in June
Tax Cuts on the Horizon
The Consumer Price Index Increased 0.3% in June
Housing Starts Increased 9.8% in June
Industrial Production Increased 0.3% in June
The Producer Price Index Rose 0.4% in June
Retail Sales Declined 0.3% in June
Politicians Should Stop Giving Investment Advice
M2 and C&I Loan Growth
The Trade Deficit Came in at $41.9 Billion in May
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
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.