Thursday, December 23, 2010

New Home Sales weak in November

by Bill McBride on 12/23/2010 10:00:00 AM

The Census Bureau reports New Home Sales in November were at a seasonally adjusted annual rate (SAAR) of 290 thousand. This is up from a revised 275 thousand in October.

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 or annualized).

Note the Red columns for 2010. In November 2010, 21 thousand new homes were sold (NSA). This is a new record low for November.

The previous record low for the month of November was 26 thousand in 1966 and 2009; the record high was 86 thousand in November 2005.

New Home Sales and Recessions The second graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

Sales of new single-family houses in November 2010 were at a seasonally adjusted annual rate of 290,000 ... This is 5.5 percent (±16.2%)* above the revised October rate of 275,000, but is 21.2 percent (±13.3%) below the November 2009 estimate of 368,000
And another long term graph - this one for New Home Months of Supply.

New Home Months of Supply and RecessionsMonths of supply decreased to 8.2 in November from 8.8 in October. The all time record was 12.4 months of supply in January 2009. This is still high (less than 6 months supply is normal).
The seasonally adjusted estimate of new houses for sale at the end of November was 197,000. This represents a supply of 8.2 months at the current sales rate.
New Home Sales Inventory The final graph shows new home inventory.

The 290 thousand annual sales rate for November is just above the all time record low in August (274 thousand). This was the weakest November on record and below the consensus forecast of 300 thousand.

This was another very weak report.

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