New Home Sales Fall In September

The housing outlook just received a jolt! New home sales fell to an annual rate of 468,000 in September which is 67,000 below Econoday's low-end estimate and the lowest rate since November last year. Making matters worse is a steep 33,000 downward revision to August. Small samples can make for severe volatility and nowhere is this more apparent than in the new home sales report. Still, apart from methodology issues, the results in this report do not confirm what was, at least, a strong outlook for the new home sales market, one where sentiment may be strong but, as evidenced in last week's housing starts report, permits have slowed.

Recent History Of This Indicator:
Samples are small and new home sales can move wildly, as they did in August and July with gains of 5.7 percent and 12.0 percent. Against these tough comparisons, a 0.6 percent dip is expected for September, one that wouldn't lower the outlook for what is - the new home sector - one of the strengths of the 2016 economy. Supply has been very low, at 4.7 months in September, but prices have been showing very little life with the median up only in the mid single digits.