Mr Gardner examines the sharp decrease in new home sales in September and the recently released Case/Shiller Index numbers.
What I Saw Last Week
U.S. New Home Sales declined by 11.5% in September to a seasonally adjusted annual rate of 468,000 from a downwardly revised 529,000 (from 552,000) in August.
The sharp drop in sales brought inventories back into alignment with sales trends. Inventory levels increased 4.2% to 225,000. That represents a 5.8 months’ supply at the current sales rate. The median new home price increased 13.5% to $296,900.
Although I had anticipated a contraction, the drop was larger than anyone had anticipated and represents the lowest number of sales since 449,000 were sold in November of last year.
What was even more surprising was that this decline came at a time when builder confidence has been on the rise. One possibility for the drop is that sales are experiencing a slight pullback month. There was talk among the National Association of Realtors that recent gains in existing home…
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