Wednesday, September 26, 2018

New home sales show further signs of rolling over

 - by New Deal democrat

New home sales, despite a month over month increase, continued their slowdown in August. Here's the graph supplied by the Census Bureau:

Since new home sales are extremely volatile month over month, the best way to look at them is on a three month average basis, and on that basis new home sales made an 11 month low.

Note that the YoY comparison is with the worst levels of last year. Last autumn there was a surge in sales. The question is, will a similar surge come to the rescue of the housing market this year? My belief is, it will not.

Last week existing home sales also continued unchanged at 12 month lows. Existing home sales have not made a new high since March 2017.

Further, inventory of new homes continues to climb slowly. Combined with the slowdown in sales, this is at very least another yellow flag that the housing market may be rolling over.

I'll have a more detailed look at both sales and prices tomorrow at Seeking Alpha, and will link to it once it is up.