New-Home Sales Up; Durables Fall
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New-home sales bounced back during August after three straight declines, while demand for expensive manufactured goods unexpectedly slipped.
Sales of homes increased by 4.1% to a 1.050 million annual rate, after falling in July, June and May. While Wall Street had expected another decline in August, the sales rate was only slightly above the 1.045 million-pace consensus of economists.
“The uptick does not suggest the end of the housing market downturn, but it does suggest a complete housing market breakdown may be less likely,” Lehman Brothers economist Drew Matus said.
Sales pace levels in July, June and May were all revised down; those adjustments were likely due to buyers backing out of sales contracts, according to MFR Inc. chief American economist Joshua Shapiro.
“Assuming that the August sales rate is revised lower next month, which seems quite likely given recent patterns, this report continues recent trends of data on actual housing activity showing continuing declines,” he wrote in a research note.
Sales were down 17.4% since August 2005 as the housing market softens. The National Association of Realtors reported sales of previously owned homes fell a fifth month in a row.
