New Home Sales
- Importance (A-F): This release merits a C+.
- Source: The Census Bureau of the Department of Commerce.
- Release Time: 10:00 ET around the last business day of the month
(data for month prior).
- Raw Data Available At: http://www.census.gov/const/newressales.pdf
The report indicates the level of new privately owned one-family houses sold
and for sale. New home sales usually have a lagged reaction to changing mortgage
rates. They also tend to be stronger early in the business cycle when pent-up
demand is strong, and they fade later in the cycle as the demand for housing is
sated. In addition to home sales, the market monitors the number of homes for
sale relative to the current sales pace. As this inventory measure falls
(rises), housing starts tend to rise (fall). Finally, the median home price
provides an indication of inflation in the housing sector, though only year/year
changes provide any meaningful information.
The home sales report is quite volatile and subject to huge revisions, making
any one month's reading very unreliable. The report rarely prompts a market
reaction. The market prefers the existing home sales report, which has a sample
data pool four times as large and is released earlier in the month.
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