US: New home sales likely to have increased 2.9% in February - Nomura

Analysts at Nomura expect US new home sales to have increased 2.9% m-o-m to a 610k annualized pace in February.

Key Quotes

“New home sales fell a sharp 7.8% m-o-m to 593k in January. This decline was likely transitory, in our view. Colder-than-usual weather in the South and Northeast likely amplified the decline in sales in January. Further, weaker sales in January were possibly driven by the sales pace returning to its previous trend after strong growth in Q4 driven by pent-up demand after the major hurricanes. As new home sales tend to be highly volatile on a monthly basis, the recent data do not affect our outlook. That said, we will observe data in the coming months to assess the impact, if any, of the recent appreciation of mortgage rates and the new tax law on new home sales.”

“We maintain that the strong job market and elevated consumer sentiment remain supportive of consumer demand, while a pick-up in home price appreciation and mortgage rates pose downside risks.”