Despite all the hype about the housing recovery, forecasters expect Wednesday’s new-home sales report will show June sales rose by barely 1% after a 7.6% jump in May.
Housing data over the past few months has been encouraging. Single-family housing starts rose in June for the fourth straight month. After two months of declines, new-home sales rebounded 7.6% in May to the highest level since April 2010.
A July survey of builder confidence hit the highest level since March 2007. The National Association of Home Builders/Wells Fargo Housing Market Index rose 6 points in July, “the largest one-month gain in nearly a decade,” NAHB boasted.
But last Thursday’s report that existing-home sales unexpectedly dropped 5.4% in June has dampened expectations for this Wednesday’s new-home sales report.
“The disappointing pace of existing-home sales is reflective of the slow pace of the housing recovery,” according to economists at Wells Fargo Securities who are forecasting a 1% increase in new-home sales for June.
“Despite the pullback in existing-home sales in June, we suspect new-home sales likely increased on the month,” the WFS economists said in their Friday report.
Economists at JPMorgan Chase see new-home sales rising 0.3% from May to a seasonally adjusted annual rate of 370,000 in June.
“The recovery in new-home sales has been a bit uneven lately,” the Chase economists say in their report.
While the NAHB/Wells survey signals that the upward trend carried over into June and early July, “We look for a very modest increase in sales to follow the larger 7.6% gain for May,” the Chase economists said.
