While the accuracy of the new home sales data is notorious questionable, with regular revisions wiping out both up- and down-side outlier prints, moments ago the Census reported that in July the US saw a whopping 654K new home sales, up 12.4%, from the prior month and higher by 31% from a year ago, smashing expectations of a 580K print, and a -2% decline from last month's pre-revision print of 592K (since revised lower to 582K).
What was most notably about the series is that while there was no sequential change in houses sold in the West, which were flat at 137K in July, the south posted a massive 18.1% jump in the month, up 40% from a year ago, surging to 398K in July from just 337K a month ago. It was not immediately clear what may have prompted this dramatic surge in home construction in the south, especially following our last week post hinting that the housing slowdown is accelerating when looking at such data points as plunging mortgage purchase applications, the Credit Suisse survey of realtors and spending on home improvement.
Perhaps the Census pushed forward the inevitable home construction that will follow as a result of the Louisiana floods, which however took place in August.
Finally, one potential catalyst for the spike in sales is that the median home price dropped from $311K in June to $294K in July, reverting to its recent average range.