New Home Sales (NHS) fell 7% in December. In addition,
both October and November had been revised down. However, several points
are worth noting...NHS is notoriously a volatile number and December was
an unusually cold month. Looking somewhat longer term, we see that
while NHS had pulled back sharply after the rise in mortgage rates in 2Q-13,
they had been building since that time. Overall, NHS gained +16.4% in
2013, while Existing Home Sales announced last week was essentially flat for
the year in an environment where home prices continue to post solid gains.
Several additional reasons for guarded optimism in the
overall housing market are still present. Housing inventories are still
moderate to low while the labor market continues to improve. So while
December NHS looked bleak, all eyes will be focusing on December’s Pending Home Sales report to judge the recovery in home sales.
Tradex Global Advisory Services, LLC
investorrelations@thetradexgroup.com
203-863-1500
@Tradex_Global
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