Analysts at Nomura point out that the US new home sales fell 5.5% m-o-m in September to 553k saar, below expectations (Nomura and Consensus: -0.6% to 625k).
Key Quotes
“Previous months (June through August) were revised down. August figures were revised down to 585k saar from 629k, likely suggesting weaker contribution to growth from brokers’ commissions.”
“Some of the weakness in September can be attributed to regional idiosyncrasies. However, slowing sales come against the backdrop of higher mortgage rates as well as affordability dampening consumer demand. While m-o-m sales figures tend to be volatile due to a small sample size, continued declines coupled with downward backward revisions suggest continued weakness in the residential investment component of US GDP in Q3 and possibly in coming quarters.”
“GDP tracking update: Weaker-than-expected new home sales in September and downward revisions to previous months suggest weaker contribution to growth in Q3 from brokers’ commissions, a component of residential investment. After rounding, however, our Q3 real GDP tracking estimate remains unchanged at 3.4% q-o-q saar.”
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