June new home sales, July S&P Global PMIs: Data in focus

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.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Melanie Riehl

Video Transcript

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 of falling 4000 in the month of June from the prior month here.

Media New home price actually declining down about 1/10 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, it actually rose 1/10 of a percent on a month over month basis.

Now the month 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 uh, front.

There has been some of some improvement 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.

Absolutely.

I also want to hit on that P MA PM I data that we were getting in S and P Global Manufacturing PM i data.

It did rise, but the details a little bit less of a bright picture here, a manufacturing specifically appointing expectations coming in at 49.5 versus the 51.6 forecast services, though in 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 PM I here.

So it's interesting.

The data could, you know, suggest that the economy does continue to and 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?

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 go lock scenario 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 PM.

We 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 points to the Goldilocks Point that you were just saying in terms of the quick reaction that we're getting to this absolutely