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Worth notingAgendaTue, Oct 27 ET 10:00 AM1 min read
New-home sales track sales of newly built single-family houses, not construction starts or existing-home transactions. The September change is estimated at -3.5%, versus a previous reading of 6.4%, pointing to a decline. Recent weakness in existing-home contracts, housing starts and mortgage applications makes builders' sales an important check. September predates the latest application drop, however, so it cannot verify the consequences of that drop.[1]
Expected −3.5% Last release 6.4%
If it comes in above expectations If the sales change is above -3.5%, sales would be more resilient than expected, potentially reducing pressure on builders to cut future projects. A result above expectations could still be a decline.[1]
If it comes in below expectations If the sales change is below -3.5%, the decline would be larger than expected. Builders could need more incentives, lower prices or fewer new projects, reducing demand for materials and construction work.[1]
Resilient sales could support homebuilders, building-material suppliers and home-furnishing companies. But sales won through costly incentives may not improve profits. Weaker sales would raise order and margin risks for those businesses, even if hopes of lower rates increase. Watch unsold inventory, selling prices and builders' incentive costs rather than the sales direction alone.[1]