Key US pending home sales reviewed – Nomura

Analysts at Nomura offered a review of the key US data from overnight.

Key Quotes:

“Pending home sales: Pending home sales rose 0.9% m-o-m in June with healthy readings across regions after falling the past two consecutive months. On a year-overyear basis, however, pending home sales were down 2.5% in June, lagging the levels a year ago for the sixth consecutive month.”

“The existing home sales report for June by National Association of Realtors indicated a pickup in existing home inventories in the month, which were up 0.5% y-o-y and marked the first y-o-y increase since May 2015. However, driven by the strong labor market and rising household wealth, demand still appears to outpace supply as implied by continued home price appreciation well above the pace of income growth.”

“While supply constraints still remain a concern, a rebound in pending home sales in June suggests some recovery could be possible in existing home sales in the coming months after a few months of declines. Residential structure outlays in Q2 were somewhat disappointing, and the weakness was partly driven by weak residential sales activity. We expect only modest growth in coming quarters considering continued supply shortages.”