US: Weak housing data - Nomura

Analysts at Nomura point out that the US new home sales declined 5.3% m-o-m in June to an annualized pace of 631k, below expectations (Nomura: -3.0% to 668k, Consensus: -3.1% to 668k).

Key Quotes

“In addition, new home sales for May were revised lower (+3.9% from +6.7% previously). The softness in the report was driven by declines in the South and West regions.”

“New home supply at the current sales pace increased to 5.7 months in June, up from 5.3 in May, but the increase was largely attributable to the lower sales pace.”

“Altogether, the weakness in the June numbers, coupled with negative revisions, indicate slightly less residential investment during Q2 than previously assumed.”

“GDP tracking update: Downward revisions to new home sales in prior months indicate slightly less residential investment in Q2 than we had assumed. In addition, new home sales in June declined somewhat more than we had anticipated. Taken altogether, we lowered our Q2 GDP tracking estimate 0.1pp to 4.5% q-o-q saar.”