Weekly Economic Report

Weekly Economic Report 10.2.17

KEY MARKET INDICATORS as of Oct 02, 2017

Key Market Indicators 10.2.17 August New Home Sales

August New Home Sales

New home sales decreased 3.4% m/m to a seasonally adjusted annual rate of 560,000 units in August. Compared to 12 months ago, new home sales were down 2.2% in August. For the year-to-date, new home sales reported an increase of 7% (or close to 41,000 units) from a year ago, which is slightly below our expectation of 10% year over year growth. The Census Bureau said the survey responses were lower than usual in areas affected by Hurricanes Harvey and Irma, meaning that the numbers may be more volatile than usual. The impact from Harvey and Irma will start to emerge later this month with the release of September data. New home sales in the South region were down 11.5% year-over-year in August.

The imbalance in the housing market today between demand and supply is concentrated at the lower-price segment, where demand is strong but supply has seen relatively little growth. Sales of new homes priced below $300,000 grew by just 14% between 2014 and 2016, while demand from first-time homebuyers has grown by 36% during the same period. New home sales in the under-$300,000 price range are up only 3% so far this year, so pressure on home prices will likely continue.

Weekly Economic Graph 10.2.17 August New Home Sales

* FHFA Purchase-Only Home Price Index

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