by Bill McBride on 8/23/2012 10:00:00 AM
Thursday, August 23, 2012
The Census Bureau reports New Home Sales in July were at a seasonally adjusted annual rate (SAAR) of 372 thousand. This was up from a revised 359 thousand SAAR in June (revised up from 350 thousand). Sales in May were revised down.
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 July 2012 were at a seasonally adjusted annual rate of 372,000 ... This is 3.6 percent above the revised June rate of 359,000 and is 25.3 percent above the July 2011 estimate of 297,000.Click on graph for larger image in graph gallery.
The second graph shows New Home Months of Supply.
Months of supply declined to 4.6 in July from 4.8 in June.
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 July was 142,000. This represents a supply of 4.6 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 38,000 units in July. 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 July 2012 (red column), 34 thousand new homes were sold (NSA). Last year only 27 thousand homes were sold in July. This was the fourth weakest July since this data has been tracked. The high for July was 117 thousand in 2005.
Even though sales are still very low, new home sales have clearly bottomed. New home sales have averaged 360 thousand SAAR over the first 7 months of 2012, after averaging under 300 thousand for the previous 18 months. Most of the recent revisions have been up too.
This was another fairly solid report and indicates an ongoing sluggish recovery in residential investment.