by Bill McBride on 6/23/2010 10:00:00 AM
Wednesday, June 23, 2010
The Census Bureau reports New Home Sales in May were at a seasonally adjusted annual rate (SAAR) of 300 thousand. This is a sharp decrease from the revised rate of 446 thousand in April (revised from 504 thousand).
Click on graph for larger image in new window.
The first graph shows monthly new home sales (NSA - Not Seasonally Adjusted).
Note the Red columns for 2010. In May 2010, 28 thousand new homes were sold (NSA). This is a new record low.
The previous record low for the month of May was 34 thousand in 2009; the record high was 120 thousand in May 2005.
The second graph shows New Home Sales vs. recessions for the last 45 years.
Sales of new single-family houses in May 2010 were at a seasonally adjusted annual rate of 300,000 ... This is 32.7 percent (±9.9%) below the revised April rate of 446,000 and is 18.3 percent (±13.0%) below the May 2009 estimate of 367,000.And another long term graph - this one for New Home Months of Supply.
Months of supply increased to 8.5 in May from 5.8 April. The all time record was 12.4 months of supply in January 2009. Since the sales rate declined sharply, the months of supply increased - this is still very high (less than 6 months supply is normal).
The seasonally adjusted estimate of new houses for sale at the end of May was 213,000. This represents a supply of 8.5 months at the current sales rate.The final graph shows new home inventory.
New home sales are counted when the contract is signed, so the tax credit related pickup in sales activity happened in April. This pulled demand forward, and April was probably the peak for new home sales this year.
The 300 thousand annual sales rate is a new all time record low. The previous record low annual sales rate was 338 thousand in September 1981.