US New Home Sales easily top expectations - Wells Fargo

Today’s US New home sales report showed a gain of 6.2% in October. Analysts from Wells Fargo explained that sales rose the fastest in the Northeast (+30.2%) and Midwest (+17.9%), suggesting that mild weather provided a big boost.

Key Quotes: 

“New home sales rose 6.2 percent in October, following a revised 14.2-percent rise the prior month. The increases bring new home sales to a new cycle high and are somewhat surprising given concerns about the lack of inventory.”

“Sales rose sharply in the Northeast and Midwest, which are the smallest regions for new home sales and often greatly influenced by atypical swings in the weather."

“The inventory of new homes rose slightly to 282,000 units, which represents a 4.9-month supply at October’s sales pace. The rise in inventories was in homes not yet started or under construction. The inventory of completed homes was unchanged.”

“Homes where construction had not yet been started accounted for all the rise in home sales, once again hinting that October’s gain in new home sales was exaggerated by seasonal adjustment.”