Expert Calls for 'Grain of Salt'

Following the Commerce Department's new-home sales data release for December 2018, experts are weighing in on supply, demand, and the one-year high for new construction homes sold that haven't been built yet.

Speaking on the latter trend, National Association of Builders chief economist Robert Dietz told MarketWatch in 2017 that it was “a real confirmation of strong demand.” Following the most recent data showing that new-home sales overall were essentially flat, and that homes sold that haven't been built yet had a share of 34.3 percent, Dietz told the financial information site that demand is moving with interest rates, “What this reflects is that builders were more cautious due to the wind coming out of the sails of the market. To me this reflects caution on the supply side.”

With a challenging 2018 in the rearview mirror – new-home sales were basically flat compared to 2017, big builder stocks lost 20 percent, and some economists think we’ve hit the end of the cycle. It bears repeating that more home purchases are both a good sign for the economy (jobs for laborers, purchases at home stores, demand for movers and gardeners and garage door installers, and so on) as well as a signal from consumers that they feel strong enough about their job prospects to sign on the dotted line.

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