Wednesday, February 26, 2014

New Home Sales at 468,000 Annual Rate in January, Highest since 2008

by Bill McBride on 2/26/2014 10:00:00 AM

The Census Bureau reports New Home Sales in January were at a seasonally adjusted annual rate (SAAR) of 468 thousand.

December sales were revised up from 414 thousand to 427 thousand, and November sales were revised down from 445 thousand to 444 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 January 2014 were at a seasonally adjusted annual rate of 468,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 9.6 percent above the revised December rate of 427,000 and is 2.2 percent above the January 2013 estimate of 458,000.
New Home SalesClick on graph for larger image in graph gallery.

This was the highest sales rate since 2008.

Even with the increase in sales over the last two years, 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 January to 4.7 months from 5.2 months in December.

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 January was 184,000. This represents a supply of 4.7 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 January 2014 (red column), 34 thousand new homes were sold (NSA). Last year 32 thousand homes were also sold in January. The high for January was 92 thousand in 2005, and the low for January was 213 thousand in 2011.

New Home Sales, NSA

This was well above expectations of 405,000 sales in January.

I'll have more later today - but this was a decent start for 2014. 

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