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News Link • Economy - Economics USA

New Home Sales Plunge to Lowest Annualized Pace in Three Years

• by Mish

That was far lower than even the lowest Econoday economist's estimate of 590,000.

The Econoday consensus was 610,000 in a range of 590,000 to 622,000. Nonetheless, Econoday was happy about a number of things.

Overstating weakness, July's headline for new home sales fell to a far lower-than-expected annualized rate of 571,000. This is offset, however, by upward revisions totaling 33,000 in the two prior months which now stand at 630,000 and 618,000. This series, where sample sizes are low, is often volatile month-to-month with the 3-month average, still over 600,000 and just off expansion highs, telling the more reliable story.

The best news in July's report is an increase in supply, up 4,000 to 276,000 new homes on the market. Relative to sales, supply moves from 5.2 months to 5.8 months which is nearly at the 6 month mark which is widely considered to be balanced for new homes.

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