US: New home sales in December declined 9.3% - Nomura

Analysts at Nomura note that US new home sales in December declined 9.3% m-o-m to an annualized pace of 625k, below expectations (Nomura: -6.5% to 685k, Consensus: -7.9% to 675k).

Key Quotes

“The declines were concentrated in the South, likely reflecting a return to trend for the area after hurricane-related distortions pushed up sales in November. Sales in the West remained strong despite declining slightly in December. By type of construction, houses sold but not started remained high, possibly related to rebuilding efforts after the recent spell of wildfires in the West. The supply of unsold new homes at the current sales pace ticked up to 5.7 months, indicating less supply-shortage pressure relative to yesterday’s existing home sales release.”

“GDP tracking update: New home sales were slightly weaker than expected in December, indicating slightly less brokers’ commissions (and hence private residential investment) in Q4. However, after rounding, we leave our Q4 GDP tracking estimate unchanged at 2.6% q-o-q saar. Note that the BEA will release the advance estimate of Q4 GDP tomorrow morning at 8:30am EST.”