Check out Mr. Gardner’s discussion about the unexpected rise in New Home sales during August 2015.
What I Saw Last Week
Existing Home Sales declined 4.8% in August to an annual rate of 5.31M units from a downwardly revised 5.58M (SAAR) (from 5.59M) in July. I had forecast a drop to 5.5M units.
The overall story in the housing market remains the same. Tight supplies and relatively high prices have cut into both demand and affordability conditions. I would contend that unless price growth softens, or an influx of inventories give buyers more options, sales growth will suffer.
That said, underlying demand trends really aren’t terrible. Even though sales in August were the lowest seen since April of this year, the drop came immediately after a month where sales rose to their highest point since February of 2007. That suggests to me that the drop was likely normal volatility rather than a big shift in trends.
Furthermore, first-time homebuyers accounted for 32% of all sales in…
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