US New Home Sales: Strong rebound to highest pace since Oct 2007 - Wells Fargo

Analysts from Wells Fargo, noted that New home sales rebounded 18.9%  following two months of declines, bringing sales to its highest level since October 2007.

Key Quotes: 

“New home sales appear to have gotten back on track in September, although the 18.9 percent spike likely exaggerates the extent of actual improvement.”

“The new home sales series is notoriously volatile and has bounced around even more than usual due to the relatively low absolute level of sales. Sales surged 25.8 percent in the South and accounted for nearly 80 percent of September’s increase. 

“Sales increased in all four census regions but the improvement was likely exaggerated by seasonal adjustment, particularly in the Northeast and Midwest.”

“The number of homes for sale was unchanged, but the stronger sales pace cut the months supply by a full month to 5.0 months. Homes priced for $300,000 or more accounted for most of the sales gain, lifting both average and median home price measures.”