Tuesday, December 24, 2013

New Home Sales at 464,000 Annual Rate in November

by Bill McBride on 12/24/2013 10:00:00 AM

The Census Bureau reports New Home Sales in November were at a seasonally adjusted annual rate (SAAR) of 464 thousand.

October sales were revised up from 444 thousand to 474 thousand, and September sales were revised up from 354 thousand to 403 thousand.   August sales were revised up from 379 thousand to 388 thousand.

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 November 2013 were at a seasonally adjusted annual rate of 464,000, 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 below the revised October rate of 474,000, but is 16.6 percent above the November 2012 estimate of 398,000."
New Home SalesClick on graph for larger image in graph gallery.

This was reported as a decrease in the sales rate, but that was because sales in October were revised up.  Sales in October and November were at the highest rate since 2008.

Even with this increase, new home sales are still near the bottom for previous recessions.

The second graph shows New Home Months of Supply.

The months of supply decreased in November to 4.3 months from 4.5 months in October.

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 November was 167,000. This represents a supply of 4.3 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 near the record low. The combined total of completed and under construction is still very low.

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

In November 2013 (red column), 33 thousand new homes were sold (NSA). Last year 29 thousand homes were sold in November. The high for November was 86 thousand in 2005, and the low for November was 20 thousand in 2010.

New Home Sales, NSA

This was above expectations of 450,000 sales in November, and there were significant upward revisions to prior months.

I'll have more later today - but this was a solid report and the housing recovery will continue.