{"id":1603,"date":"2019-09-25T13:38:19","date_gmt":"2019-09-25T17:38:19","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1603"},"modified":"2019-09-25T13:38:19","modified_gmt":"2019-09-25T17:38:19","slug":"august-new-home-sales-3","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1603","title":{"rendered":"August New Home Sales"},"content":{"rendered":"\n

KEY DATA:<\/strong> Sales: +7.1%; Year-to-Date:\n+6.4%; Prices (Over-Year): +2.2%<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cThe housing market is stabilizing, which is\ngood news.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  Housing has been a drag on the economy but\nthat may be fading.  We had already seen\nthat existing home sales rose in August and the improvement in sales was more\nthan matched by a jump in demand for new houses.<\/em><\/strong>  The pick up in sales, though, was hardly\nuniversal.  New home purchases fell in the Northeast\nand Midwest, rose strongly in the South and surged by over 16% in the West. <\/em><\/strong> When looking at sales for the first eight\nmonths of this year compared to 2018, we see a similar pattern.  Overall demand was up solidly but there were\ndouble-digit declines in the Northeast and Midwest that were more than offset\nby strong gains in the rest of the country.  \nAs for prices, they increased modestly over the previous year.<\/em><\/strong>  The share of sales that were priced at or\nabove $400,000 jumped from 27% in July to 37% in August.  That is pretty unusual and explains the nice gain\nin the median cost of a new home. However, prices have been largely flat or down for\nthe past year, so I am not reading too much into the August gain.  <\/em><\/strong>MARKETS AND FED\nPOLICY IMPLICATIONS:<\/strong>It is\nnot likely that anytime soon, housing will once again lead the economy\nforward.  Rates are already incredibly\nlow again and that really didn\u2019t do much. \nWorse, the disappointing performance of the housing sector occurred when\nconsumer confidence was extremely high. \nThat is changing.  Yesterday, the\nConference Board reported that its Consumer Confidence Index posted its largest\ndecline in nine months.  <\/em><\/strong>The\nlevel is still high, but there has been clear deterioration in household views\non both current conditions and the expectations of the future are\nfaltering.  That creates concern that the\nhousing market may stagnate again going forward.  We are close to completing the third quarter\nand there is little reason to believe that GDP growth will be significantly\ngreater than 2%.<\/em><\/strong>  The government\nmay have wound up spending money like crazy to beat the end of the fiscal year,\nbut it would be better if the private sector, led the way.  As for the Fed, we will have to wait for\nChair Powell to get out of his bunker and say something meaningful before we\ncan determine when or if there will be another rate cut.  I think that the employment data will be\nkey.  If we stay in the 150,000 to\n175,000 range in job creation and the unemployment rate is largely stable,\nthere would be little reason to do anything. \nBut, of course, that has been the economy and the Fed did cut\nrates.  So, if anyone knows what economic\nmodel Jay Powell uses to help him make his decisions, please tell me.  I have no clue. <\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: Sales: +7.1%; Year-to-Date: +6.4%; Prices (Over-Year): +2.2% IN A NUTSHELL:  \u201cThe housing market is stabilizing, which is good news.\u201d WHAT IT MEANS:  Housing has been a drag on the economy but that may be fading.  We had already seen that existing home sales rose in August and the improvement in sales was more … Continue reading August New Home Sales<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1603","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1603","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1603"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1603\/revisions"}],"predecessor-version":[{"id":1604,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1603\/revisions\/1604"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1603"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1603"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1603"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}