US New Home Sales are ramping Up - Wells Fargo

New home sales surged 17.5% to a 733,000-unit pace while sales for prior three months were revised lower. Even with the revisions, the three-month trend still shows new home sales clearly strengthening, explained analysts from Wells Fargo. 

Key Quotes: 

“Drawing firm conclusions from the housing data this time of the year is often perilous, as the seasonal adjustment process normally makes huge corrections to the underlying data, which typically slow this time of year. This year, however, sales have risen, reflecting both stronger economic growth and unseasonably mild winter weather. Development activity has also ramped up, giving builders a little more inventory to sell.”

“The strength in sales is not surprising. Homebuilder confidence has surged, as buyer traffic and sales ramped up.”

“The greatest limitation to home sales continues to be a lack of inventory. With few completed homes available, sales of homes not yet started accounted for most of November’s increase”