U.S. new home sales fall in July

U.S new home sales dropped in July from upwardly revised figure of June. New home sales reportedly dropped 9.4 percent to a 571,000-unit pace in July; however, sales for June were upwardly revised by 20,000 units to a 630,000 unit pace. The series is notoriously volatile and even falls or gains of this magnitude are within the norm, noted Wells Fargo in a research report.

Demand for homes still seems to be rebounding. Homebuilder sentiment rose strongly in August and builders usually record solid sales, especially in the South and West. With sales dropping in July, the month’s supply of homes rose to 5.8 months from 5.2 – the highest since September 2015. New home inventories continue to be exceptionally lean in an absolute sense, but particularly completed homes, stated Wells Fargo.

Inventories are increasing at the most rapid pace in the South and West, which account for the overwhelming majority of new home sales. Inventories in the West continue to be below their historic norms.

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