ETFs To Gain As U.S. New Home Sales Hit 14-Year High

The latest new home sales data is upbeat as sales of newly-built, single-family homes rose to the highest in August since September 2006 in the United States. Per the Commerce Department data, new home sales rose 4.8% in August to a seasonally adjusted annual rate of 1.011 million units. This compares favorably with July’s sales pace that was revised upward to 965,000 units from 901,000 units. Moreover, the metric has comfortably beat economists’ forecast of a 1% decline to a rate of 895,000-units, per a Reuters poll. Year over year, new home sales rose 43.2% in August from the year-ago estimate of 706,000. Notably, new home sales are considered a leading housing market indicator since they are counted at the signing of a contract, per a Reuters article.

New home sales, which make up for 14% of housing market sales, rose in the Northeast and South but declined in the Midwest and West. Notably, there was a 4.3% year-over-year decline in median new house price to $312,800 in August, per a Reuters article. Meanwhile, the number of new homes on market in August declined to 282,000 from 291,000 in July.

Housing Market: Bright Spot in U.S. Economy

The recently-released data on the U.S. builder confidence paints an upbeat picture of the U.S. housing market. Per the monthly National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), builder confidence for newly-built single-family homes surged to an all-time high of 83 points in September compared with 78 points in August, 72 in July, 58 in June, 37 in May and 30 in April (the lowest since June 2012). Notably, the previous month’s reading was the highest in the 35-year long history of the index, matching the December 1998 record. Any reading above 50 is considered positive and signals at improving the sentiment. Notably, all three components of the index have gained.

Going on, sales of existing homes in August witnessed the strongest pace since the 2006-end. National Association of Realtors’ (NAR) data showed a 2.4% rise in the existing homes sales to a seasonally adjusted annual rate of 6 million units in August (marking three straight months of positive sales gains). Further, existing home sales rose 10.5% year over year.

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Disclosure: contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

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