Preview: Due Apr 23 - U.S. March New Home Sales - Stable trend but downside risk
We expect a March new home sales level of 660k, which would be a 2.4% decline after a 1.8% February increase if February’s 676k outcome is unrevised. While other housing sector data has been quite volatile new home sales have seen little direction. Risk is on the downside, modestly for this month and more so going forward.
Most housing sector data has had a negative tone, including the NAHB homebuilders’ survey for March. New home sales have been more stable, with the significant recent negatives in October and January being attributable to weather. Weather is likely to be supportive in March, but the negative survey evidence means risks are on balance on the downside.
With Fed easing only likely to be significant if the economy enters recession, future upside for new home sales looks limited, with either Fed policy or the general economic picture likely to restrain demand.
We expect prices to show upward corrections on the month, the median by 2.0% and the average by 3.0% after respective February declines of 3.0% and 4.1%. However yr/yr data would remain negative, the median at -3.1% from -1.5% and the average at -4.0% from -4.4%.