Analysts at Wells Fargo Securities point out that US new home sales surprised to the upside by rising 5.8 percent in March to a 621K-unit pace—its second highest point of the current cycle.
“Revisions to prior months’ data added to the rosy picture of the new home buying season early in 2017. We could have had a bit of a payback from warm weather in January and February pulling forward sales from March, but that did not appear to be the case, which speaks to the strong underlying fundamentals currently supporting the new home market. The labor market is the number one support as job growth has pushed the unemployment rate to cycle-lows, putting homeownership in closer reach of more people.”
“Homebuilders have noted the improvement in housing demand in the NAHB/Wells Fargo Housing Market Index, which has hovered near its cycle-high in recent months. We expect new home sales increased further in April to a 622,000-unit pace, which would be a fresh cycle-high.”