New Home Sales
New home sales in June came in at 610k annualized, about in line with the estimate of 615k vs 605k in May which was revised down by 5k. For comparison, the 3 month average is now at 603k vs the 6 month run rate of 607k and vs 561k in 2016. We are though still running 15% below the 15 year average where the bubble peak was 1.389mm in July 2005. Supply continues to improve as the number of homes for sale rose to the most since July 2009 and the months’ supply ticked up by one tenth to 5.4. The measure of median home prices jumps around a lot, unlike in the existing home sales data, and it fell 3.4% y/o/y.
Bottom line, the home sales data has been pretty steady this year with a modest step up vs last year. Absolute levels though are still pretty muted historically speaking and stated here many times, more supply of lower priced homes is where demand is most needed considering the amount of households that have been choosing to rent. What is limiting this from a margin perspective however is the high costs of labor, lots and permitting. I also repeat my belief that pricing has begun to see some pushback from buyers and Pulte Home confirmed that yesterday when they announced some discounting on some of their inventory. ITB, the builder etf, is modestly down on the day but was lower before this number came out. Let’s call this number a non event today for markets.
NEW HOME SALES
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.