Monday, January 27, 2014

New Home Sales at 414,000 Annual Rate in December

by Bill McBride on 1/27/2014 10:00:00 AM

The Census Bureau reports New Home Sales in December were at a seasonally adjusted annual rate (SAAR) of 414 thousand.

November sales were revised down from 464 thousand to 445 thousand, and October sales were revised down from 474 thousand to 463 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 December 2013 were at a seasonally adjusted annual rate of 414,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.0 percent below the revised November rate of 445,000, but is 4.5 percent above the December 2012 estimate of 396,000.

An estimated 428,000 new homes were sold in 2013. This is 16.4 percent above the 2012 figure of 368,000.
New Home SalesClick on graph for larger image in graph gallery.


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

The second graph shows New Home Months of Supply.

The months of supply increased in December to 5.0 months from 4.7 months in November.

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 December was 171,000. This represents a supply of 5.0 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 December 2013 (red column), 28 thousand new homes were sold (NSA). Last year 28 thousand homes were also sold in December. The high for December was 87 thousand in 2005, and the low for December was 23 thousand in 1966 and 2010.

New Home Sales, NSA

This was below expectations of 450,000 sales in December, and there were downward revisions to prior months.


I'll have more later today - but this was a weak ending to a solid year. 

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