US: Underlying demand for homes remains strong – Wells Fargo

Data released on Friday showed New Home Sales rose in August by 1.5%, against expectations of a modest decline. According to analysts at Wells Fargo, sales have cooled down compared to the feverish pace seen in late 2020 and early 2021 but they argue that despite some moderation recently, the overall pace of sales is still very strong relative to before the pandemic. 

Key Quotes: 

“New home sales rose 1.5% to a 740,000-unit pace during August. The modest pick-up in sales continues to show that underlying demand for homes remains strong. The slight pull-back in sales experienced this spring and early summer likely had more to do with builders struggling to build enough homes to show prospective buyers. It is challenging to sell a home when you are unable to tell a buyer when that home will be completed.”

“Lumber prices have come down from the exorbitant levels seen this spring. Other key building materials, however, remain in short supply, which is delaying new starts and preventing projects from wrapping up. An uptick in the already lofty NAHB/Wells Fargo Housing Market Index (HMI) for the month of September, which was released separately this week, provides addition evidence that builders are still overwhelmingly optimistic, even with supply-side headwinds.”

“The 740,000 unit pace registered during the month is the fastest since April. Sales have cooled down compared to the feverish pace seen in late 2020 and early 2021. Despite some moderation recently, the overall pace of sales is still very strong relative to before the pandemic. For context, there were 683,000 new homes sold in 2019.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD jumps to three-week highs near 1.1650 amid falling dollar, yields

EUR/USD is trading close to 1.1650, recovering ground to clinch three-week highs. The pair cheers risk-on mood-led decline in the US dollar. Treasury yields pullback, as poor US industrial data tempers hawkish Fed’s expectations. Focus on ECB and Fedspeak.


GBP/USD advances towards 1.3800 amid risk-on mood, hawkish BOE

GBP/USD is advancing towards 1.3800, reaching the highest levels in five weeks, helped by a broad decline in the US dollar and rising BOE rate hike bets. The greenback is losing ground amid a resurgent appetite for riskier assets. BOE's Bailey hinted at a rate hike to contain inflation. 


Gold eyes $1,780 amid recent USD weakness

Gold prices lock in some fresh gains above $1,770 amid a recent pullback in the greenback. The US benchmark Treasury yields trade lower at 1.57% with 0.57% losses, which weigh on the greenback.  A lower USD valuation enhances the appeal of the precious metal for the other currencies holders. 

Gold News

Litecoin on the cusp of 26% breakout

Litecoin price is on the penultimate leg of a technical formation that will catalyze a quick bull rally. LTC needs to clear one critical hurdle to kick-start a run-up to levels last seen more than a month ago. Litecoin price has been on a slow but steady uptrend since Oct 13.

Read more

Netflix Stock Price and Forecast: When are NFLX earnings?

Netflix stock falls nearly 1% on Friday ahead of earnings. NFLX releases earnings on Tuesday, October 19, after the close. Netflix stock has been boosted by the success of Squid Game.

Read more