Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       

Blog Home
   Brian Wesbury
Chief Economist
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
X •  LinkedIn
  New Single-Family Home Sales Increased 3.7% in January
Posted Under: Data Watch • Home Sales • Housing
Supporting Image for Blog Post


Implications:  New home sales rose in January, although not quite as fast as the consensus expected.  Sales increased 3.7% in January and are now up 5.5% versus a year ago, illustrating the "fits and starts" recovery of the past several years.  Using the 12-month moving average to cut through the volatility shows the upward trend in sales remains intact.  Meanwhile, despite a 9,000 increase in unsold new homes, inventories remain low by historical standards (see chart to right) and are not a headwind to future construction.  Most of this gain in inventories in January was due to homes where construction has yet to start.  Going forward, we expect housing to remain a positive factor for the economy.  First, employment gains continue which should put upward pressure on wage growth.  Second, the mortgage market is starting to thaw.  Third, the homeownership rate remains depressed as a larger share of the population is renting, leaving plenty of potential buyers as economic conditions continue to improve.  Unlike single-family homes which are counted in the new home sales data, multi-family homes (think condos in cities) are not counted.  So a shift back toward single family units will also serve to push reported sales higher.  Look for overall gains in home sales in the year ahead as these factors combine to drive expansion, and any headwind created by an increase in mortgage rates is offset by expectations of faster future economic growth.  In other recent housing news, the FHFA Index, which measures prices for homes financed with conforming mortgages, increased 0.4% in December and was up 6.2% in 2016, the second fastest increase for any calendar year since 2005.  More broadly, new claims for unemployment insurance increased 6,000 last week to 244,000.  Continuing claims fell 17,000 to 2.06 million.  It's still early, but plugging these figures into our models suggests a nonfarm payroll gain of about 195,000 for February, which would boost the odds of a March rate hike.

Click here for PDF version  

Posted on Friday, February 24, 2017 @ 10:58 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.