US: New home sales fell 11.4% m-o-m in April - Nomura
|The research team at Nomura notes that the US new single family home sales fell 11.4% m-o-m in April, slowing to an annualized pace of 569k and the reading was below expectations (Nomura: -3.4% to 600k, Consensus: -1.8% to 610k).
Key Quotes
“There was an annual revision to data from January 2015 through March 2017. All three months in Q1 were revised upwards and accentuated a sharp decline in April. The decline in this series was in part heralded by some moderation in incoming data on housing permits. It is also possible that there was some adverse impact from mean reversion from a very high reading in March. Note that the revised March reading of 642k saar (previously reported as 621k) is the strongest pace since October 2007.”
“Further, new home sales tend to be volatile due to the relatively small size of the sample. Other indicators on consumer demand held up in April, coupled with steady job creation and wage growth. Smoothing through monthly fluctuations, new home sales have been improving steadily.”
“GDP tracking update: The pace of new home sales was weaker than expected in April. This reading implies less brokers’ commissions in Q2. As a result, we lowered our Q2 GDP tracking estimate by 0.1pp to 3.4%. The impact of the annual revision to Q1 GDP tracking was muted as brokers’ commissions from the new single-home housing sector accounts for only a small fraction of residential investment. Thus, our Q1 GDP tracking estimate is currently unchanged at 0.7%.”
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