by Bill McBride on 7/25/2012 10:00:00 AM
Wednesday, July 25, 2012
The Census Bureau reports New Home Sales in June were at a seasonally adjusted annual rate (SAAR) of 350 thousand. This was down from a revised 382 thousand SAAR in May (revised up from 369 thousand). Sales in March and April were revised up too.
The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.
Sales of new single-family houses in June 2012 were at a seasonally adjusted annual rate of 350,000 ... This is 8.4 percent below the revised May rate of 382,000, but is 15.1 percent above the June 2011 estimate of 304,000.Click on graph for larger image in graph gallery.
The second graph shows New Home Months of Supply.
Months of supply increased to 4.9 in June from 4.5 in May.
The all time record was 12.1 months of supply in January 2009.
This is now in the normal range (less than 6 months supply is normal).
The seasonally adjusted estimate of new houses for sale at the end of June was 144,000. This represents a supply of 4.9 months at the current sales rate.On inventory, according to the Census Bureau:
"A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted."Starting in 1973 the Census Bureau broke this down into three categories: Not Started, Under Construction, and Completed.
This graph shows the three categories of inventory starting in 1973.
The inventory of completed homes for sale was at a record low 41,000 units in June. The combined total of completed and under construction is at the lowest level since this series started.
The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).
In June 2012 (red column), 33 thousand new homes were sold (NSA). Last year only 28 thousand homes were sold in June. This was the third weakest June since this data has been tracked. The high for June was 115 thousand in 2005.
Even though sales are still very low, new home sales have clearly bottomed. New home sales have averaged 358 thousand SAAR over the first 6 months of 2012, after averaging under 300 thousand for the previous 18 months. All of the recent revisions have been up too.
So even though sales in June were below the consensus forecast of 370,000, this was still a fairly solid report given the upward revisions to previous months. Based on recent revisions, sales in June will probably be revised up too.