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What the August New Home Sales Report Means for Mutual Fund Investors

Shauna O'Brien Sep 24, 2014

The New Home Sales for August 2014 were released on Wednesday. New home sales skyrocketed in August, reaching their highest point since 2008.

Inside the August New Home Sales

New home sales surged 18% in August, the largest one month jump since 1992 and highest sales since May 2008. Total homes sold reached 504,000, beating expectations of 426,000.

From August 2013, new home sales have risen 33%. The report indicated that the number of homes available on the market has declined. If this continues, it may be good news for homebuilders including KB Home (KBH), Lennar (LEN) DR Horton (DHI) and Ryland Homes (RY).

On Wednesday, KB Home released its third quarter earnings results, which came in higher than a year ago.

Investors have seen disappointing results in new home sales and housing starts over the last few months, but many investors are seeing an upside after this latest report.

Mutual Funds on Watch

For mutual fund investors that are expecting the housing recovery to continue, there are several funds that offer exposure to some of the biggest home builders mentioned above.

Symbol	Mutual Fund	Holdings
FSHOX	Fidelity® Select Construction & Housing Portfolio	LEN KBH RY
CGMFX	CGM Focus Fund	LEN
FDVLX	Fidelity® Value Fund	KBH

The Bottom Line

Economic reports are an important indicator for mutual fund investors that have exposure to stocks that could be impacted. This report is important for investors because it gives a general overview of the state of the housing sales.