New Home Sales

New Home Sales

November 27, 2017 – New single-family home sales represent the number of brand new houses that were purchased or committed to being purchased over the course of a month.  This indicator has a trickle-down effect as demand rises for durable goods and consumer spending increases, boosting GDP.  It is also a sign of strength in the consumer balance sheet to make the investment.

New home sales increased 6.2% in October to a 685,000 annualized rate, well above September’s downward revision to 645,000. This was also well above the consensus of 620,000. The median price dropped to $312,800 and year-over-year prices are up 3.3%. Sales rose in all regions in October. The months’ supply of new homes is at 4.9 months.

The Northeast region was a main contributor to the increase in new home sales making up 30.2% followed by the Midwest with a 17.9% increase. Even though a new home does not have to be completed to be considered a “sale”, if a deposit or agreement has taken place to build a house it is considered a sale. This could mean people are just receiving permits or putting a down payment down and building hasn’t even began to stimulate the economy. New homes being built translates into building materials as well as retail home goods boosting the economy.

New Home Sales