Photo: TD Securities
Later this morning we will get the latest reading on new home sales in the U.S.While most U.S. housing data has been very bullish, new home sales has been the one data point that has been a bit of a concern.
Most new home metrics like housing starts, building permits, and prospective buyers’ traffic (see left) have been far outpacing new home sales.
This divergence “has caused us to question whether homebuilding activity is beginning to edge too far ahead of the market’s capacity to absorb the new supply,” wrote TD Securities’ Millan Mulraine last month.
“[W]ith homebuyers continuing to be drawn by the bargains in the existing homes market, sales of new home are likely to continue the underperformance in the medium term,” wrote Mulraine yesterday. “The October data is clear of hurricane related distortions and is likely to remain so next month as well. New home sales in the affected hurricane regions are negligible.”
The October new home sales report will be released at 10:00 AM EST.
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