US: New home sales likely remained near their current level in November – Wells Fargo
|Data released on Wednesday showed that New Home Sales in the US climbed 0.3% in October, despite upward corrections to previous months. Analysts at Wells Fargo, point out that new home sales are so strong that they are even up when they are down
Key Quotes:
“New home sales fell 0.3% in October to a 999,000-unit annual rate. The consensus estimate had called for a slight increase from September’s initially reported 959,000-unit pace. Sales were revised higher for July, August and September, with the prior two months both slightly topping a one-million unit annual sales pace. As a result, October’s sales pace still came in
24,000 units above expectations, even though it declined by an ever-soslight 0.3%. Sales over the past three months have averaged just slightly over a one million unit pace.”
“We were somewhat skeptical of the drop in new home sales initially reported last month. That earlier reported drop simply seemed out of sorts with anecdotal reports from homebuilders, even though it left sales at a still very strong pace.”
“The buoyance in builder confidence, which leads new sales by a month, means new home sales likely remained near their current level in November as well.”
“New home sales are also weighted more heavily toward homes where construction has not yet started. Sales of such homes rose nearly 20% in October to a 385,000-unit pace and slightly outpaced homes currently under construction (348,000 units) and sales of completed homes, which tumbled 21% to a 266,000-unit pace.”
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