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U.S. new home sales rise above expectations in May

New home sales in the U.S rose in the May. The sales were up 6.7 percent to 689k. The outturn was above consensus expectations of 667k. In the meantime, the April print was downwardly revised and the cumulative revision since February totalled 13k. All of the rise in May came from the South region, which recorded a 17.9 percent surge in sales.

Overall, the sales side of the report was stronger than expected. Meanwhile, data on prices for new homes disappointed. The average price of a new home dropped 6.6 percent sequentially and is down 2.6 percent compared to the same period last year.

The months’ supply of new homes dropped to 5.2, as the rise in sales was stronger than the rise in inventories. The number of new homes sold where construction is yet to begin rose to a six-month high, which implies a rebound in residential construction in the months ahead.

“With regard to the effect on our Q2 tracking estimate, the strong sales numbers were offset by the decline in new home prices and imply slightly lower brokers’ commissions relative to what we had pencilled in”, stated Barclays in a research report.

At 16:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -106.716. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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