24 Jun 2014
US new home sales May jump possibly a one-off - ING
FXStreet (Łódź) - Teunis Brosens from ING points out that data released today showed that US new home sales jumped 18.6% in May to 504K, beating consensus, but believes that this sharp increase is a one-off.
Key quotes
"This upward surprise may be a late winter catch-up effect. New home sales were clearly below trend in February to April. But including May, average sales since February are 443k, which is closely in line with sales in the latter half of 2013."
"Our working hypothesis therefore is that May’s jump is a one-off, and sales will likely revert to the pre-winter 440-460k range next month."
"Earlier today, the April Case-Shiller 20-City home price index decelerated markedly. Prices increased 0.2% MoM , well below the 0.9% average monthly price rise we have seen in recent months. Prices are now up 10.8% over a year ago, down from 12.4% last month."
"A further slowdown of home prices in the coming months is likely as existing home sales are 5% lower than a year ago, even after yesterday’s uptick."
"But the still limited supply of existing homes for sale, 5.3 months right now versus a long-term average of 6.5, will ensure that prices will not weaken substantially."
Key quotes
"This upward surprise may be a late winter catch-up effect. New home sales were clearly below trend in February to April. But including May, average sales since February are 443k, which is closely in line with sales in the latter half of 2013."
"Our working hypothesis therefore is that May’s jump is a one-off, and sales will likely revert to the pre-winter 440-460k range next month."
"Earlier today, the April Case-Shiller 20-City home price index decelerated markedly. Prices increased 0.2% MoM , well below the 0.9% average monthly price rise we have seen in recent months. Prices are now up 10.8% over a year ago, down from 12.4% last month."
"A further slowdown of home prices in the coming months is likely as existing home sales are 5% lower than a year ago, even after yesterday’s uptick."
"But the still limited supply of existing homes for sale, 5.3 months right now versus a long-term average of 6.5, will ensure that prices will not weaken substantially."