Tom Porcelli, RBC, and Maury Harris, UBS, discuss the slew of recent U.S. economic data and what it signals about the health of the U.S. economy.
Americans purchased more new homes last month, the Commerce Department said Thursday, but put prices fell in July, offering mixed signals about the strength of a nascent recovery in the housing market.
The government said new home sales for July rose 3.6 percent to a seasonally adjusted 372,000-unit annual rate, matching a two-year high seem in April. Economists forecast a total of 365,000 annualized units. Compared to July last year, new home sales were up 25.3 percent.
“The data is modestly better than expected, so from that perspective it is a constructive report,” said Jacob Oubina, a senior economist at RBC Capital Markets in New York.
Still, home sales are bumping along at very low levels, he added, predicting a slowdown in home purchases after the summer.
The housing report showed prices dropped last month, with the median price of a new home down 2.5 percent in July from a year earlier to $224,200.
The government's estimates for new home sales are prone to substantial revisions, and June's sales pace was revised up to 359,000 units from the previously reported 350,000 units.
The July housing data follow a report Wednesday from the National Association of Realtors that showed more Americans purchased previously-owned homes last month, suggesting improvement in the beleaguered housing market over the summer.
Low interest rates and a modest improvement in the labor market helped home-buying conditions, the NAR said. Other trends that are helping housing include mortgage rates, which are at near-record lows, and housing prices that are down sharply from the mid-decade housing bubble period.
Wednesday’s housing number was seen as the latest sign that the housing market, which is beginning to recover from the after-effects of the financial crisis, is perking up. Recent data show sales and prices are becoming stable.
On Wednesday, luxury homebuilder Toll Brothers reported higher quarterly profit and a strong increase in new orders.
“We are enjoying the most sustained demand we’ve experienced in over five years,” Douglas C. Yearley, Toll’s chief executive officer, said in a statement.
Reuters contributed to this report.