Housing gains in September followed slow August
INDICATOR: » September New Home Sales KEY DATA: SALES: » +3.1 percent; Over-Year: +29.8 percent; Prices: +1.9 percent IN A NUTSHELL: » “Housing sales are rising decently despite the lack of homes for sale.” WHAT IT MEANS: » Housing is a critical component of the economy and the new home sector is the most important part of this key segment. It looks like conditions are steadily improving as new home sales rose moderately in September. Of course, there was a huge downward revision to the August numbers, so the increase did come from a smaller base.
The gain was driven by a sharp rebound in Northeast sales and a solid rise in the Midwest. Sales were up more moderately in the South but in the West they fell. For the first nine months of this year, demand has increased by 13 percent compared to the same period in 2015. I think that pretty much tells the story. As for prices, they were up modestly over the year, which is a puzzle. The supply of homes is nearing the lowest levels we have seen in the last forty years, which should be causing prices to rise faster. The percentage change over the year has bounced around lately, so this