Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  New Single-Family Home Sales Increased 13.8% in June
Posted Under: Data Watch • Home Sales • Housing
Supporting Image for Blog Post

 

Implications:  The recovery in new home sales continued at a break-neck pace in June, rising more than even the most optimistic forecast by any economics group to the highest level since 2007.  That's right, new home sales were higher in June than before COVID-19 hit the US economy.  Keep in mind that sales of new homes are counted when the contracts are signed, so they represent a timelier indicator of activity than existing home sales, which are counted at closing.  There are a couple of factors that should continue to drive new home sales higher in the months ahead. First, affordability is increasing; Fed rate cuts have reversed the increase in mortgage rates we saw prior to the shutdowns and rates now sit below 3% for the first time on record.  Second, due to the pandemic, buyers' preferences look to be shifting away from units in denser urban environments, toward the more spacious options in the suburbs where most new single-family homes are built.  However, a lack of finished new homes waiting for buyers could be a headwind for sales going forward.  In the past year, the only portion of the inventory of unsold new homes that has seen gains has been homes where construction has yet to start.  Meanwhile, the inventory of unsold homes that are either under construction or finished is still down from a year ago.  Given the downward pressure that social distancing regulations, shortages of labor, and supply chain issues continue to exert on new construction, we do not expect an oversupply of homes anytime soon.  As a result, home prices should continue to rebound in the next several months.  In other recent news, initial jobless claims rose last week for the first time since March, coming in at 1.416 million, up 109,000 from the week before.  It looks like the recent "second-wave" of coronavirus infections, and the resulting shutdowns of bars and restaurants in many states, is causing headwinds for the labor market recovery.  Meanwhile, continuing claims, which lag initial claims by a week, declined 1.1 million to a reading of 16.2 million. Combined, these readings suggest job growth continued in July, but at a slower pace than June.  Finally, on the manufacturing front, the Kansas City Fed index rose modestly to +3 in July from +1 in June. This represents a return to pre-pandemic levels, and a significant recovery from the reading of -30 during April in the middle of the crisis.

Click here  for PDF version

Posted on Friday, July 24, 2020 @ 11:11 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
 PREVIOUS POSTS
Coronavirus High Frequency Data
Existing Home Sales Increased 20.7% in June
Coronavirus High Frequency Data
There's No Such Thing As A Free Lunch
M2 and C&I Loan Growth
COVID-19 Tracker
Housing Starts Increased 17.3% in June
Coronavirus High Frequency Data
Retail Sales Rose 7.5% in June
Industrial Production Increased 5.4% in June
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.