Thursday, January 29, 2009

Record Low New Homes Sales in December

by Bill McBride on 1/29/2009 10:00:00 AM

The Census Bureau reports, New Home Sales in December were at a seasonally adjusted annual rate of 331 thousand. This is the lowest sales rate the Census Bureau has ever recorded (starting in 1963).

New Home Sales Monthly Not Seasonally Adjusted Click on graph for larger image in new window.

The first graph shows monthly new home sales (NSA - Not Seasonally Adjusted).

Notice the Red columns for 2008. This is the lowest sales for December since 1966. (NSA, 23 thousand new homes were sold in December 2008, 23 thousand were sold in December 1966).

As the graph indicates, sales in 2008 are substantially worse than the previous years.

New Home Sales and Recessions The second graph shows New Home Sales vs. recessions for the last 45 years. New Home sales have fallen off a cliff.

Sales of new one-family houses in December 2008 were at a seasonally adjusted annual rate of 331,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

This is 14.7 percent (±13.9%)* below the revised November of 388,000 and is 44.8 percent (±10.8%) below the December 2007 estimate of 600,000.
And one more long term graph - this one for New Home Months of Supply.

New Home Months of Supply and RecessionsThe months of supply is at an ALL TIME RECORD 12.9 months in December (this is seasonally adjusted)!
The seasonally adjusted estimate of new houses for sale at the end of December was 357,000. This represents a supply of 12.9 months at the current sales rate.
New Home Sales InventoryThe final graph shows new home inventory. For new homes, both sales and inventory are falling quickly since starts have fallen off a cliff.

Note that new home inventory does not include many condos (especially high rise condos), and areas with significant condo construction will have much higher inventory levels.

This is a another very weak report. Record low sales. Record high months of supply. Ouch. I'll have more on new home sales later today ...