New-Homes Sales Miss Estimates. By a Lot.

By my count, 13 Fed officials are giving speeches or testimonies this week. That’s a lot of jargon headed our way. The good news is that inflation fears continue to abate. The 10-year Treasury yield is below 1.5%.

This morning’s new-home sales report came in at 769,000. That’s the annualized number. That’s a big miss. Wall Street had been expecting 865,000. Of course, home prices have been shooting up so that should put some pressure on buying.

Not only that but the previous three months were revised downward. By a lot.

Shipping bottlenecks and higher input prices have held back homebuilding, contributing to skyrocketing prices for the limited supply of homes available. A silver lining of the report was data showing new-housing inventory continued to increase, though about a third of those homes have yet to be built.

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There were 330,000 new homes for sale in May, the most since July 2019. At the current sales pace, it would take 5.1 months to exhaust the supply of new homes, compared with 4.6 months in the prior month.

The median sales price rose to a record $374,400. Mortgage applications have fallen sharply since January, suggesting that demand for homes is slowing.

Posted by on June 23rd, 2021 at 11:45 am


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