US new home sales: Look for partial pullback back to 580,000 units - RBS

Research Team at RBS, notes that the US new home sales were stronger than expected in June, rising by 3.5% to 592,000 units (SAAR), a new cycle high.

Key Quotes

“In July, we look for only a partial pullback back to 580,000 units, which would still be the second best level dating back to February 2008. New construction activity has remained healthy throughout the summer. Single-family housing starts increased by 3.9% in June and another 0.5% in July, reaching the highest level of ground breaking activity since late 2007.

In August, the National Association of Home Builders (NAHB) housing market index rose from 58 to 60, returning to the June level (which was the highest figure since January). According to the NAHB Chairman, “new construction and new-home sales are on the rise in most areas of the country …Historically low mortgage rates, increased household formations and a firming labor market will help to keep housing on an upward path during the rest of the year.”