- John Ryding, chief economist at RDQ Economics
US new home sales dropped to their lowest level in seven months in June, while May's data was revised sharply lower, indicating a minor setback for the housing market rebound. Sales of newly built homes plunged 6.8% in the reported month from May to a seasonally adjusted annual rate of 482,000, the lowest level since November 2014, according to the Commerce Department. Economists, however, had expected a rate of 550,000. In May, sales declined 1.1%, compared with an initially reported 2.2% rise. New home sales make up only 8.1% of the housing market and are notorious for a high volatility on a monthly basis. The broader trends indicate the new-home market is gaining traction along with the overall housing sector. Measured on an annual basis, new home purchases surged 18.1% from the previous year. Sales averaged an annual rate of 512,000 in the first half of 2015, compared with an average of 440,000 for all of 2014.
In a separate report, Markit said business activity in the US manufacturing sector rose in July, rebounding from the lowest level in almost two years reached in June. US manufacturing PMI edged higher to 53.8 this month, up from 53.6 in June. Yet, manufacturers admitted that investment spending cuts in the energy sector continued to weigh on sales.
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