US New Home Sales: Another strong housing report – Wells Fargo

A positive surprise in the economic data released on Tuesday came from the US housing sector with New Home Sales rising above expectation in July. According to analysts at Wells Fargo, the surge in new home sales coincides with a sharp rise in builder confidence. 

Key Quotes: 

“New home sales handily topped optimistic expectations, with overall sales rising 13.9% to a 901,000-unit pace, following a 15.1% jump the prior month.”

“With so many people working from home, going to school from home or simply confined to their home, there appears to be a shift from higher-price rental housing toward homeownership. The shift comes at a time when inventories of new homes are near record lows, prompting strong gains in residential development.”

“The median price of a new home jumped 7.2% over the past year. The gain reflects lean inventories and higher construction cost.”