A second straight decline in purchases of new U.S. homes, combined with downward revisions for prior months, show a tepid market as results begin to be clouded by the fallout from Hurricanes Harvey and Irma, according to government data Tuesday.

Highlights of New Home Sales (August)
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  • Single-family home sales fell 3.4% m/m to 560k annualized pace (est. 585k) after 580k rate (revised from 571k)
  • Supply of homes at current sales rate rose to 6.1 months, highest since July 2014; 284k new houses were on market at end of August, most since May 2009
  • Purchases fell in three of four U.S. regions, led by a 4.7% decrease in the South; unchanged in Midwest

 

Key Takeaways

While data aren't available at the state or local level, areas in Texas and Florida affected by Harvey and Irma accounted for about 14% of single-family housing units authorized by permits in 2016, the Census Bureau said in a special notice. If no sales information is received by the government, the units' status is assumed to be unchanged.

It may be hard to get a clear read on the market's underlying trends in the next few months as economic data become volatile thanks to three major hurricanes: Harvey in southeast Texas in late August, Irma in Florida in early September, and Maria in Puerto Rico last week.

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