New Home Sales Stuck in a Rut
October new home sales came in at 368k annually, which was down slightly from September's 369k. Here's where it gets interesting; the September data was actually revised all the way down from 389k which at the time had been seen as a strong gain and a two and a half year high. With these changes though, we now see a new home demand trend that has remained essentially flat since May. The consensus estimate was calling for 388k, which would have been flat from the unrevised September number.
There were positives to be seen though, including 60k home sales in the Midwest, the highest since September 2009, and 111k in the West, the highest since July 2008. Those gains were offset by declines in the Northeast and South.
In the end this dented the markets this morning which is understandable as it's more confirmation that the housing rebound story has hit somewhat of a speed bump. Yet, one thing I found interesting was that out of the 29k non-annualized sales during the month (the headline number is an annual rate), 9k of those homes hadn't been started yet. That goes to show that homebuilders are still catching up to demand, so even though home sales were flat it remains bullish for construction.
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