- Data released on July 24 showed that US new home sales rose steadily in June.
- Some other housing sector indicators, including existing home sales and housing starts, were weak.
US new home sales
On July 24, the US Commerce Department released June’s new home sales data. US new home sales increased 4.5% year-over-year to an SAAR (seasonally adjusted annual rate) of 646,000 in the month. New home sales increased 7% on a sequential basis. The data showed a median house price of $310,400 in June, similar to the corresponding month in 2018. While June’s new home sales data showed strong growth, some other housing sector indicators pointed to a weak market.
May US new home sales data revised downward
The Commerce Department revised its May new home sales downward to 604,000 from the previous estimate of 626,000 units. US new home sales data for April and March were also revised downward. Mortgage applications fell last week despite falling interest rates. US interest rates have tapered down as the Federal Reserve has taken a dovish stance on rates. The Fed abruptly halted its rate hikes earlier this year. It’s widely expected to cut rates next week.
Other housing sector indicators
Data released on July 23 showed that existing home sales fell 1.7% to an SAAR of 5.27 million units in June. The data released last week showed that housing starts and building permits had missed estimates, and building permits fell to a two-year low. Housing starts and building permits are leading housing industry indicators. The housing sector has been weak lately despite the fall in mortgage rates.
The manufacturing sector has also been in a rough patch. The Eurozone’s manufacturing flash PMI (purchasing managers’ index) came in at 46.4 in July. The PMI stood at 47.6 last month. The region’s July PMI was worse than expected. As economic growth stalls globally, central banks have warmed to rate cuts. Expectations of a rate cut have helped revive market sentiments. The S&P 500 (SPY) is currently trading close to its all-time high. SPY had its best first half since 1997.
This week, we’ll get a look at several other data points. Second-quarter GDP data is set to release on Friday. According to the Reuters poll, the US economy could have expanded 1.8% in the second quarter. It expanded 4.2% in the second quarter of 2018 and 3.1% in the first quarter of 2019. This week, we’ll also see a lot of earnings releases. Facebook is scheduled to release its earnings on July 24.
Boeing and AT&T released their earnings results earlier today. AT&T missed revenue estimates. The 737 Max crisis took a toll on Boeing’s earnings. Amazon and Alphabet are scheduled to release their earnings tomorrow.
Last week, Amazon, Alphabet, Facebook, Apple, and Alphabet testified before lawmakers over antitrust concerns. Read Big Tech Is in Big Trouble in Europe and the US for more analysis.