by Bill McBride on 10/24/2012 10:00:00 AM
Wednesday, October 24, 2012
The Census Bureau reports New Home Sales in September were at a seasonally adjusted annual rate (SAAR) of 389 thousand. This was up from a revised 368 thousand SAAR in August (revised down from 373 thousand). This is the highest level since April 2010 (tax credit related bounce).
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 September 2012 were at a seasonally adjusted annual rate of 389,000 ... This is 5.7 percent above the revised August rate of 368,000 and is 27.1 percent above the September 2011 estimate of 306,000.Click on graph for larger image in graph gallery.
The second graph shows New Home Months of Supply.
The months of supply declined in September to 4.5 months. August was revised up to 4.6 months.
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 September was 145,000. 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.
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 September. The combined total of completed and under construction is just above the record low since "under construction" is starting to increase.
The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).
In September 2012 (red column), 31 thousand new homes were sold (NSA). Last year only 24 thousand homes were sold in September. This was the sixth weakest September since this data has been tracked (above 2011, 2010, 2009, 1981 and 1966). The high for September was 99 thousand in 2005.
Even though sales are still very low, new home sales have clearly bottomed. New home sales have averaged 364 thousand SAAR over the first 9 months of 2012, after averaging under 300 thousand for the previous 18 months. Sales are finally above the lows for previous recessions too.
This was slightly above expectations of 385,000, and was another fairly solid report. This indicates an ongoing recovery in residential investment.