New Home Sales
New home sales fell 1.9 percent in October to an annual rate of 563,000 homes. Sales for the prior three months were also revised lower. The slower pace raises concerns as to how consumers will respond to rising mortgage rates, which will further challenge affordability and the ability of potential borrowers to qualify.
A positive trend in the underlying data has been the slight pickup in inventories. The inventory of for-sale homes has risen over the past three months, rising to 248,000 homes in October.
New home sales remain up a solid 12.7 percent for the first 10 months of the year relative to the same period a year ago. We expect new home sales to register a 12.8 percent gain for 2016 as a whole and rise another 6 percent in 2017.