Wednesday, January 26, 2011

New Home Sales increase in December

by Bill McBride on 1/26/2011 10:00:00 AM

The Census Bureau reports New Home Sales in December were at a seasonally adjusted annual rate (SAAR) of 329 thousand. This is up from a revised 280 thousand in November.

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 December 2010, 22 thousand new homes were sold (NSA). This is a new record low for the month of December.

The previous record low for December was 23 thousand in 1966; the record high was 87 thousand in December 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 December 2010 were at a seasonally adjusted annual rate of 329,000 ... This is 17.5 percent (±17.7%)* above the revised November rate of 280,000, but is 7.6 percent (±17.0%)* below the December 2009 estimate of 356,000.
And another long term graph - this one for New Home Months of Supply.

New Home Months of Supply and RecessionsMonths of supply decreased to 6.9 in December from 8.4 in November. The all time record was 12.1 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 December was 190,000. This represents a supply of 6.9 months at the current sales rate.
New Home Sales Inventory The final graph shows new home inventory.

The 329 thousand annual sales rate for December is still very low, and this was just the weakest December on record. This was above the consensus forecast of 300 thousand homes sold (SAAR).

It says something when sales increase and are still below the previous record lows for all years prior to 2010. New Home sales are still bouncing along the bottom - the good news is inventory is still declining.

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