US new home sales: Expect a decline of 3.7% to an annualized 570k - Nomura

Research Team at Nomura, notes that the US new home sales handily beat market expectations in June – increasing by 3.5% m-o-m to an annualized 592k – and the prior month’s figure was revised higher to an annualized 572k from 551k.

Key Quotes

“New home sales hit a higher gear in recent months, as housing demand picked up on stronger consumer fundamentals and low mortgage rates. We expect home sales to trend gradually higher in the medium term, but supply constraints will likely hold back the housing market to some degree. In the near term, incoming data on housing construction and mortgage application for purchases suggest some slowdown. As such, we forecast a decline of 3.7% to an annualized 570k.”