Your preference has been saved. Remove your saved preference.
You must supply both a username and a password to login.
You must supply a username, password and token to login.
Sign on
Passport secured login icon  
Wealth Management
Asset Management
Asset Servicing
Insights & Research
About Northern Trust
Search go
Click to close drop down menu.
Click to close drop down menu.
Financial Intermediary
Learn about asset management solutions designed for Retirement Plan Advisors, TAMPs/Outsourcing Providers, Subadvisory Program Sponsors, RIAs/Financial Advisors and Trust Institutions.
Learn about asset management solutions including: global index management, active equity and fixed income, target retirement date funds, and manager of manager programs.
Get answers to your investment challenges with asset management capabilities including alternatives, exchange traded funds, fixed income, mutual funds and tax-advantaged equity.
Click to close drop down menu.
Northern Trust Logo

Weekly Economic Commentary


New Home Sales – Headline and Details Remain Encouraging

June 25, 2012

Load PDF Version

Sales of new single-family homes rose 7.6% to an annual rate of 369,000 units, after a nearly steady reading in April. Regionally, sales of new homes fell in the Midwest (-10.6%) and West (-3.5%), while they moved up in the Northeast (+36.7%) and South (+12.7%).

DEC 6/25/2012 Chart 1

The median price of a new single-family home fell 0.6% to $234,500 in May from the prior month’s reading, marking the third consecutive monthly decline. However, on a year-to-year basis, the median price of a new single-family home posted a 5.6% increase, the fourth straight monthly gain.

DEC 6/25/2012 Chart 2

The May report shows that it takes a shorter period of time to sell a new single-family home (7.9 months) in the past three months compared with the situation a year ago (9.2 months).

DEC 6/25/2012 Chart 3

The number of homes for sale has dropped to a 4.7month supply mark from a 6.6 months’ supply in May 2011. The May reading of the inventory-sales ratio is significantly below the historical mean of 6.2-months (see Chart 4). Essentially, there is a small supply of new homes in marketplace at the present time.

DEC 6/25/2012 Chart 4

The six-month moving average of sales of new and existing homes has increased 6.0% to 4.852 million units from the December tally of 4.578 million units (see Chart 5) but the pace of gains is small enough for the Fed to depict the housing sector as “depressed” in its June 20 policy statement. At the cost of being repetitive, labor market conditions have to show robust improvements for the housing sector to gather noticeable momentum.

DEC 6/25/2012 Chart 5

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.