EmailNew home sales decreased for the third consecutive month. Sales fell from a downwardly revised 300,000 (from 312,000) in June to 298,000 in July. The Briefing.com Consensus expected new home sales to increase to 310,000.
Even though new home sales fell on a monthly basis, they held up fairly well given the uncertainty surrounding the debt ceiling negotiations and the overall economic environment. Some analysts expected new home sales to collapse in a fashion similar to the preliminary August reading of the University of Michigan Consumer Sentiment data. That reading fell to its lowest level since 1980.
Still, a downward trend does suggest the housing sector remains weak. Housing starts will likely decline in-line with the drop in sales.
Inventories remained at a 6.6 months supply. The total number of homes for sale fell slightly from 166,000 in June to 165,000 in July, reaching a new historical low. With the number of homes currently under construction in a steady decline, inventory levels should fall regardless if sales pick up.
