There was not much economic news this past week. Much of it centered around the construction sector. The Architectural Billings Index rose in June. This index has tended to lead construction activity, which means overall construction should continue to be healthy for at least a few months.
New home sales took a big drop last month, and the 12-month percent change in sales is below zero. Maybe there simply aren’t enough new homes on the market to create an upward trend in sales. In any case, this report was unexpectedly bad.
Fortunately, sales of existing homes rose in June. I think it’s most important to evaluate the housing industry by total sales (new plus existing homes). The fact that new home sales were poor is bad news for construction companies and workers. But, the level of existing home sales dwarfs that of new homes. With existing home sales trending higher,