U.S. new home sales rebounds in May, housing sector likely to see steady recovery

The U.S. new home sales recovered in May, coming in stronger than anticipated. The new home sales rose 2.9 percent sequentially to 610k, as compared with consensus expectations of 590k. Part of the miss relative to the expectation also came from the upward revisions to earlier data, noted Barclays in a research report. The rate of new home sales in April was upwardly revised to 593k, while March’s sales were upwardly revised by 2k to 644k.

Region wise, the scenario looked mixed. Gains were concentrated in the South and West regions, whereas the other two regions recorded declines. Months’ supply continued to be stable at 5.3, or about where it stood in January of this year. The median price of new home sales rose strongly by 11.5 percent on the month. Overall, today’s report strengthens the view of a stable rebound in the housing sector, stated Barclays.

“Following today’s better-than-expected data, and upward revisions to April’s numbers, our residential investment tracking estimate stands higher by two-tenths at 2.9 percent. Nevertheless, after rounding, our Q2 GDP tracker remains unchanged at 2.0 percent”, added Barclays.

At 16:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -57.0352. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest