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Economy
In reply to the discussion: Weekend Economists Sit on a Wall August 23-25, 2013 [View all]xchrom
(108,903 posts)25. Everyone's Struggling To Make Sense Of Yesterday's Awful New Home Sales Report
http://www.businessinsider.com/homebuilders-having-trouble-selling-homes-2013-8
NOTE: This post originally appeared on SoberLook.com on Friday, August 23.
Today's news of a sharp decline in new home sales has left many economists scratching their heads, trying to understand the trajectory of the US housing market. And here is what they are struggling with:
With the homebuilder survey showing tremendous optimism while new homes not selling well, there is clearly a disconnect. Just as other economists, Goldman's research team is having a tough time reconciling the two. GS also points out that new home sales represent a somewhat more timely indicator than the existing home sales number - which was quite strong in July (see this post).
GS: - Based on contract signings rather than closings, new home sales are a slightly more timely indicator of housing activity than the stronger-than-expected July existing home sales data released earlier this week. The recent weakness is concerning in light of the rise in mortgage rates in recent months and drop in new purchase mortgage applications. However, the weakness in new home sales stands sharply in contrast to the NAHB homebuilders index, which points to more favorable prospects for housing starts and new home sales in coming months.
Read more: http://soberlook.com/2013/08/ecstatic-homebuilders-having-trouble.html#ixzz2cswmKW7N
NOTE: This post originally appeared on SoberLook.com on Friday, August 23.
Today's news of a sharp decline in new home sales has left many economists scratching their heads, trying to understand the trajectory of the US housing market. And here is what they are struggling with:
With the homebuilder survey showing tremendous optimism while new homes not selling well, there is clearly a disconnect. Just as other economists, Goldman's research team is having a tough time reconciling the two. GS also points out that new home sales represent a somewhat more timely indicator than the existing home sales number - which was quite strong in July (see this post).
GS: - Based on contract signings rather than closings, new home sales are a slightly more timely indicator of housing activity than the stronger-than-expected July existing home sales data released earlier this week. The recent weakness is concerning in light of the rise in mortgage rates in recent months and drop in new purchase mortgage applications. However, the weakness in new home sales stands sharply in contrast to the NAHB homebuilders index, which points to more favorable prospects for housing starts and new home sales in coming months.
Read more: http://soberlook.com/2013/08/ecstatic-homebuilders-having-trouble.html#ixzz2cswmKW7N
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