Tuesday, June 25, 2013

New Home Sales at 476,000 SAAR in May

by Bill McBride on 6/25/2013 10:00:00 AM

The Census Bureau reports New Home Sales in May were at a seasonally adjusted annual rate (SAAR) of 476 thousand. This was up from 466 thousand SAAR in April (April sales were revised up from 454 thousand).

February sales were revised up from 429 thousand to 445 thousand, and March sales were revised up from 444 thousand to 451 thousand. Very strong upward revisions.

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 May 2013 were at a seasonally adjusted annual rate of 476,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.1 percent above the revised April rate of 466,000 and is 29.0 percent above the May 2012 estimate of 369,000."
New Home SalesClick on graph for larger image in graph gallery.

The second graph shows New Home Months of Supply.

The months of supply increased in May to 4.1 months from 4.0 months in April.

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 May was 161,000. This represents a supply of 4.1 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 is at a record low. The combined total of completed and under construction is also just above the record low.

The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).

In May 2013 (red column), 45 thousand new homes were sold (NSA). Last year 35 thousand homes were sold in May. The high for May was 120 thousand in 2005, and the low for May was 26 thousand in 2010.

New Home Sales, NSA

This was above expectations of 460,000 sales in May, and a very solid report, especially with all the upward revision to previous months.  I'll have more later today.

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