US: Focus on new home sales - RBS

Research Team at RBS, notes that the US new home sales surged to their best level in nine years, rising by 12.4% in July to a seasonally adjusted annualized level of 654,000 units and this inherently volatile series however may have retreated in August, to a level of 600,000 units.

Key Quotes

“The market for single-family units has shown upward momentum. In fact, new home sales have risen at a double digit year-on-year pace in each month since April. The National Association of Home Builders’ present sales index edged up from 63 in July to a five-month high of 65 in August, and topped that with a reading of 71 in September. However, limited supplies could have restrained the pace of sales in August.

In July, new homes for sale at the end of the month stood at their lowest level since November last year. Those 233,000 homes, at the current demand level only translate into 4.3 months of supply (lowest since May 2013). Moreover, new construction activity cooled in August as housing starts on single-family units toppled to a ten-month low of 722,000 (annualized) units.”