Analysts at Nomura point out that the US new home sales rose 3.5% m-o-m in August to 629k saar, above Nomura’s expectation but matching the market consensus reading (Nomura: 608k, Consensus: 630k).
Key Quotes
“Revisions, however, lowered July reading significantly to 608k from previously reported 627k and appear negative to residential investment growth in Q3.”
“The weakening in the market has likely been driven by gradually slowing turnover in the market as prices and mortgage rates continue to rise. While median price growth for new homes appears to have stabilized somewhat, rising costs for construction will weigh on new housing starts.”
“GDP tracking update: While August new home sales came in stronger than our expectations, the July estimates were revised down and June estimates were revised up. The net impact on our tracking forecast for real residential investment was modestly positive. After rounding, our Q3 real GDP growth tracking estimate was raised by 0.1pp to 3.4% q-o-q saar.”
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