Preview: Due 26 February - U.S. January New Home Sales - A hit from weather
We expect a January new home sales level of 630k, which would be a steep 9.7% decline if December’s 3.6% increase to 698k is unrevised, though we would see any January weakness as likely to largely due to bad weather. October, hit by hurricanes, saw an even steeper 15.3% fall.
Upward pressure on mortgage rates due to fading expectations of Fed easing presents downside risk to home sales going forward, but survey evidence from the NAHB and MBA suggest demand held up in January. February NAHB data was weaker. Bad weather, both unusual cold in much of the country and fires in Los Angeles, is however likely to deliver a temporary hit to sales.
After stronger data in February, we expect the median price to fall by 2.0% in January while average prices are unchanged. This would see yr/yr data at -2.8% for the median and -2.7% for the average, after respective December gains of 2.1% and 4.2%.
