Last Update: 10-Oct-14 16:58 ET
New Home Sales
- New home sales jump 18.0% in August to 504,000 from an upwardly revised 427,000 (from 412,000) in July. The Briefing.com consensus expected new home sales to increase to 435,000.
- That was the first time that new home sales surpassed 500,000 since May 2008, and the increase was in-line with the spike in the September NAHB home builder index. That index reached its highest point since November 2005.
- With the exception of the Midwest region, which was flat, sales growth was extremely strong across the U.S. That included a 50.0% increase in sales in the West and a 29.2% increase in the Northeast.
- The sharp increase in sales resulted in an equally sharp decline in available supply. Months' supply fell to 4.8 months in August from 5.6 months in July and is at its lowest point since June 2013 when there was a 4.2 months' supply. A 6 months' supply is considered normal.
- It is unknown if sales growth can continue at its current pace. The new home price premium continues to rise as the median new home price increased 8.0% y/y to $275,600 in August. Affordability conditions are weakening as low income growth is not keeping pace with recent home price gains.
- The sales spike in August pulled new home sales off its smooth 12-month moving average for the first time in 2014.
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