US New Home Sales Preview: Not so new for markets

New home sales are forecast to rise modestly in June after a large May jump. Market impact is set to be limited but concern is rising about the economy in the second half, as FXStreet’s analyst Joseph Trevisani notes.

Key quotes

“Purchases of all classes of new housing, normally about 10% of the overall housing market, are forecast to rise 4% to an annualized rate of 700,000 units from 676,000 in May. This would equal the six month average of 701,000 from July to December last year.”

“Home purchases and construction employment for the second half will depend on the course of the economy and the evolving status of the pandemic in the US.” 

“Housing sales are a lagging indicator as they depend on consumers’ confidence in their employment and the overall economy.  The May and June recovery does not guarantee a second-half revival and markets are more interested in the future than the past.”