Wednesday, September 26, 2012

New Home Sales at 373,000 SAAR in August

by Bill McBride on 9/26/2012 10:00:00 AM

The Census Bureau reports New Home Sales in August were at a seasonally adjusted annual rate (SAAR) of 373 thousand. This was down slightly from a revised 374 thousand SAAR in July (revised up from 372 thousand). Sales in June were revised up.

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 August 2012 were at a seasonally adjusted annual rate of 373,000... This is 0.3 percent below the revised July rate of 374,000, but is 27.7 percent above the August 2011 estimate of 292,000.
New Home SalesClick on graph for larger image in graph gallery.

The second graph shows New Home Months of Supply.

The months of supply was unchanged in August at 4.5 months. July was revised down from 4.6 months.

The all time record was 12.1 months of supply in January 2009.

New Home Sales, Months of Supply 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 August was 141,000. This represents a supply of 4.5 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.

New Home Sales, InventoryThis 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 August. 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 August 2012 (red column), 31 thousand new homes were sold (NSA). Last year only 25 thousand homes were sold in August. This was the third weakest August since this data has been tracked. The high for August was 110 thousand in 2005.

New Home Sales, NSAEven though sales are still very low, new home sales have clearly bottomed. New home sales have averaged 362 thousand SAAR over the first 8 months of 2012, after averaging under 300 thousand for the previous 18 months. Most of the recent revisions have been up too.

This was below expectations of 380,000, but this was another fairly solid report and indicates an ongoing sluggish recovery in residential investment.
New Home Sales graphs

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