Catalysts hosts Seana Smith and Madison Mills break down the latest data from US new home sales and Purchasing Managers' Index (PMI) prints.
New home sales in June fell to 617,000, declining 0.6% and coming in well below expectation of a 3.4% increase. The median new home price declined to $417,300, and the average selling price was just over $487,000. Homes for sale in June rose 0.8% on a month-over-month basis, and the supply was at an average of 9.3.
PMI fell below expectations on the manufacturing front, coming in at 49.5 versus the anticipated 51.6 in the S&P Global US Manufacturing PMI.
However, services PMI came in at 56, higher than the expected 54.9 for the S&P Global US Services PMI.
Overall, the composite beat economic forecasts and was the best reading for those surveys since the spring of 2022.
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This post was written by Melanie Riehl
Some breaking news that we have out here at the top of the hour. We're getting the latest reading on new home sales falling to 617,000. That was below what the street had been expecting. New home sales are falling 4,000 in the month of June from the prior month here. Median new home price actually declining. Down about a 10th of a percent on a year-over-year basis to $417,300 average selling price was $408 just over $487,000. Homes for sale in June actually rose 8/10 of a percent on a month-over-month basis. Now the month's supply was at an average of 9.3 in June and that was up from the prior month here. But again overall new home sales falling to 617,000, coming in below the street's expectations. And it was a continuation of the story that we were talking about with existing home sales yesterday and that's the fact that mortgage rates given where they are right now, given the fact that home prices I guess at least on the new home front, there has been some of some improvement here from a year-over-year standpoint. But again, the fact that home prices remain very high, not too not too far from those record highs. Many people who are out there wanting to buy homes simply cannot afford it right now. We're seeing a bit of a chilling effect across the housing market, Maddie.
Absolutely. I also want to hit on that PMI PMI data that we're getting and S&P Global Manufacturing PMI data. It did rise. But the details a little bit less of a bright picture here. Uh manufacturing specifically disappointing expectations coming in at 49.5 versus the 51.6 forecast. Services though and the composite did beat economic forecast. It was the best reading for those surveys since the spring of 2022. So the details under the hood not as great as the headline number here, which was 56, which was above the number that was anticipated for PMI here. So it's interesting the data could, you know, suggest that the economy does continue to expand thanks to that services sector. But we are seeing some softness when you look under the hood. And this is a really big question mark for the Federal Reserve moving forward here because if services spending continues to fuel growth in the economy, does that give them the soft landing scenario that they're looking for or does it lead to a continued fueling of inflation moving forward here? Though I guess one of the things that too as I'm kind of looking at, I have one analyst saying that the survey does suggest a Goldilocks scenario with GDP coming in around 2.5% and suggesting inflation hitting 2% in the third quarter here. But the employment data not as strong as July, so that could also be a red flag. Certainly a mixed picture in the PMI print.
Yeah, Maddie, when you take a look at the average prices here, charge for goods and services that rose at the slowest pace that we've seen since January, the second slowest rate actually that we've seen since October 2020. So that also in some points to the Goldilocks point that you were just saying in terms of the quick reaction that we're getting to this breaking news.
Absolutely.