Data released today showed better-than-expected numbers in the new home sales report. According to analysts at Wells Fargo today the housing market is in a far better place, with new home inventories and affordability now much more closely in line with their long-term norms.
Key Quotes:
“Sales of new homes fell 0.7% in October to a 733,000-unit pace. Sales for the prior month were revised substantially higher, however, and the trend in new home sales continues to show solid improvement, with sales averaging a 725,667-unit pace over the past three months””the strongest pace of this expansion.”
“The improvement in new home sales is a much needed bright spot for an economy that struggled a bit late this summer, as uncertainty about trade negotiations with China ramped up. The Fed’s three quarter-point cuts in the federal funds rate have lowered the borrowing costs for builders, which are increasingly focusing on lower-margin and higher-volume tract building.”
“The combination of a small drop in October new home sales and large upward revision to September sales, which were revised from a 701,000-unit pace to a 738,000-unit pace, make it more important to focus on the year-to-date numbers.”
“New home sales through the first 10 months of this year are running 9.6% ahead of their year-ago pace. Last year at this time, new home sales were reeling, as interest rates rose faster and to a higher level than had been expected at the start of the year.”
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