If Fed Chair Jerome Powell is looking for yet another excuse to keep the money printer rolling, then this is it.
Following a moderate revival in what were several months of subdued numbers, new home sales across the US left analysts in awe, as they plunged 6.6% in June to the lowest since April 2020, against projections compiled by Bloomberg calling for a 3.7% increase. And, to further add to the unpleasant surprise, May’s figures were revised downwards from -5.9% to -7.8%.
And, even more astonishing is that new home sales are nearly 20% below year-ago levels— the sharpest decline since 2011. There were a total of 353,000 new homes up for sale in June, the highest since 2008; however, only 10% of them had been completed, while another 100,000 have yet to be constructed. At the same, the median price jumped 6.1% from June 2020, to $361,800.
Construction input costs have been sent soaring over the past several months, as elevated prices for everything from transportation to labour have kept homebuilding activity subdued. Although some analysts— as cited by Bloomberg— are anticipating supply chain constraints to ease over the coming months, raging wildfires throughout the west coast of Canada and the US threaten to send lumber prices sky-high once again.
Information for this briefing was found via the Commerce Department and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.