23 Dec 2014
US housing market may continue on an upward trend – Nomura
FXStreet (Barcelona) - The Research Team at Nomura shares that US existing home sales declined to 4.93mn below consensus at 5.20mn for the first time since May, and further anticipates the US housing market to continue on an upward trend with choppy movements.
Key Quotes
“Existing home sales declined by 6.1% m-o-m to an annualized 4.93mn in November, well below expectations (Nomura: 5.15mn, Consensus: 5.20mn), and is the first month in which sales have dipped below the 5.00mn mark since May.”
“This steep decline is surprising given that mortgage rates in November were the lowest since May of last year. It is possible that heavy snowfall in some sections of the Midwest and Northeast in November delayed some contract closings. However, this does not explain sales declining in all four regions. It is also possible that a decline in the number of homes on the market in November from October constrained sales.”
“Housing inventory was up only 1.95% on the year, the lowest year-ago increase since March.”
“Our expectation is for the housing market to continue on an upward trend, but for this improvement to be choppy.”
“As such, we forecast residential investment to grow at a relatively conservative 6.6% next year. An eventual pick-up in income growth and a gradual loosening of credit standards should help boost the housing market in outer years.”
Key Quotes
“Existing home sales declined by 6.1% m-o-m to an annualized 4.93mn in November, well below expectations (Nomura: 5.15mn, Consensus: 5.20mn), and is the first month in which sales have dipped below the 5.00mn mark since May.”
“This steep decline is surprising given that mortgage rates in November were the lowest since May of last year. It is possible that heavy snowfall in some sections of the Midwest and Northeast in November delayed some contract closings. However, this does not explain sales declining in all four regions. It is also possible that a decline in the number of homes on the market in November from October constrained sales.”
“Housing inventory was up only 1.95% on the year, the lowest year-ago increase since March.”
“Our expectation is for the housing market to continue on an upward trend, but for this improvement to be choppy.”
“As such, we forecast residential investment to grow at a relatively conservative 6.6% next year. An eventual pick-up in income growth and a gradual loosening of credit standards should help boost the housing market in outer years.”