US: Focus on housing data – Nomura

Analysts at Nomura note that the US home price appreciation has shown no signs of slowing so far in 2018 as the Case-Shiller composite 20 home price index increased 6.4% y-o-y in January, the highest 12-month increase since 2014, and easily outpacing income and wage growth over a similar period.

Key Quotes

“A shortage of available homes for sale combined with firm consumer fundamentals supporting increased demand will likely continue to push up residential home prices over the medium term. However, given headwinds for high-end markets such as a reduction in property tax deduction, price appreciation will be more concentrated in middle- to low-end markets going forward.”

“New home sales: We expect new home sales to remain essentially flat in March, increasing only 0.3% m-o-m to an annualized pace of 620k. Despite decreasing for the past three months, soft single-family permits data combined with unfavorable weather conditions will likely result in a muted reading for new home sales in March.”