In the previous article, we discussed the sharp growth in existing home sales at a national level. In this article, we’ll discuss regional home sales performance.
Northeast and Midwest home sales soar
All four major regions of the country witnessed substantial increases in home sales in December 2015. The charge was led by the Northeast and Midwest regions. The Northeast region witnessed year-over-year (or YoY) home sales growth of 11.9% to 750,000, followed by the Midwest region with a growth of 9.9% to 1.2 million units. The West region experienced YoY growth of 8.9% in homes sales to 1.2 million. On the other hand, the South region lagged with a growth of 4.6% to 2.3 million.
On a monthly basis, the West region witnessed the highest growth of 23.2%, followed by the South region with 14.6%, the Midwest at 10.9%, and the Northeast at 8.7%.
South is the largest contributor
Though home sales growth in the South region were the lowest among the four regions, its contribution to home sales was the highest at 41.6% in December.
The South region was followed by the West and Midwest regions with contributions of 22.3% each, while the Northeast contributed the least at 13.7%.
Homebuilders to benefit
The strong rise in the Midwest region bodes well for homebuilders such as D.R. Horton (DHI) and KB Homes (KBH), which have strong presences in the region. A surge in home sales in the Northeast region is beneficial to PullteGroup (PHM) and Toll Brothers (TOL). The iShares U.S. Home Construction ETF (ITB) has 6.8% exposure in Toll Brothers.
In the next part of the series, we’ll discuss the factors that led to the surge in home sales in December.