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New Homes Sales Stall
The one big piece of economic data out today was new home sales and it was a big disappointment on the surface. June sales were down 8.4% month to month to 350k annually from 382k, versus expectations of a slight gain. Obviously not a great result, and especially disappointing given housing has been one of the few bright spots in the economy in the past couple of months. Consequentially, homebuilder stocks are down an average of about 2% today.
However, looking into the report I'd say it's not as bad as it looks at first. For one, most of the drop came from a big 60% seasonally adjusted drop in the Northeast. Note that the Northeast is always volatile, and adjustments make for big swings in the numbers. On an adjusted basis, the numbers in that region were down to 16k from 40k, but non-adjusted sales merely fell to 1k from 4k. Otherwise, the Midwest was up 15% and the West was up 2%. Also, the three previous months were revised substantially higher.
Nevertheless, there's still a sense here that new home sales could be losing that strong momentum they had earlier, and that would be entirely believable in this economy.
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