• New home sales jumped 8.3% to 497,000 in June 2013, thereby beating market expectations for 484,000 annualized unit sales in the month.
• The inventory of unsold new homes rose by 1.3% to 161,000 in June from 159,000 in May; however, the pickup in overall sales resulted in the months’ supply of new home available for sale falling to a five-month low of 3.9. This represents a tight supply of unsold homes compared to the longer-run average of 6.1 months’ supply.
Sales of new single-family homes in the US jumped 8.3% to an annualized 497,000 units in June 2013 following downwardly revised gains in each of the previous two months (1.3% and 2.3% in May and April, respectively, compared to previously reported gains of 2.1% and 3.3%, respectively). New home sales in June were above market expectations of 484,000 annualized units and represent the highest level since May 2008. The sizable headline increase in June reflected solid gains in the Northeast (18.5% to 32,000 annualized units), West (13.8% to 124,000), and South (10.9% to 274,000), although sales declined in the Midwest (-11.8% to 67,000) to provide some offset.
The inventory of unsold new homes rose 1.3% to 161,000 in June from 159,000 in May; however, the pickup in overall sales resulted in the months’ supply of new home available for sale falling to a five-month low of 3.9. This represents a very tight supply of unsold homes compared to the longer-run average of 6.1 months’ supply.
New home sales averaged 470,000 annualized units in the second quarter of 2013, which was the highest quarterly level since the second quarter of 2008 and an annualized increase of 20.1% over the first quarter of 2013. The improving demand for new homes, along a similar upward trend in existing homes sales, is occurring against a backdrop of a tight supply of homes available for sale in the market and contributing to sizable increases in home prices. This is consistent with the earlier-reported improvement in homebuilders’ sentiment and supports our expectation that residential construction activity will accelerate in the second half of this year.
RBC