New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances. Why Investors Care
| Released on 5/24/07 For Apr 2007 | ||||||||||||
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Highlights
New home sales jumped 16 percent in April to a much higher-than-expected annual unit rate of 981,000. The year-on-year decline eased back to 10.6 percent, showing improvement from a year-and-a-half stretch of often 20 percent declines and sometimes nearly 30 percent declines. Improvement was centered in the South where sales jumped 28 percent.
The month's big gain helped supply, which fell a record year-on-year 4.8 percent. On a months' basis, supply fell to 6.5 months from 8.1 in March. The median price eased, down 11 percent in the month to $229,000 for a year-on-year decline of 10.9 percent. Remember, falling home prices have long been expected to be a drag on consumer spending.
Today's report falls in line with a recent run of improvement in weekly Mortgage Bankers' data, the latest released yesterday morning. Builders are complaining and housing permits are down, but otherwise the outlook for the residential sector may be improving. Existing home sales data will be tomorrow's focus. Treasuries fell and the dollar firmed in reaction to the data.
New home sales edged up 2.6 percent in March to an 858,000 annualized pace. Importantly, supply fell back to 7.8 months from an extremely swollen 8.1 months in February. Nonetheless, sales are still soft and need to rise before residential construction activity can pick up. Sales are down 23.5 percent on a year-on-year basis.
New home sales Consensus Forecast for April 07: 0.860 million-unit rate
Range: 0.825 million to 0.900 million-unit rate
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There is no question that lower interest rates boost home sales. Other factors also impact housing decisisions, such as employment and income growth, and wealth stemming from stock market gains. |
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