Tuesday, March 25, 2014

New Home Sales at 440,000 Annual Rate in February

by Bill McBride on 3/25/2014 10:00:00 AM

The Census Bureau reports New Home Sales in February were at a seasonally adjusted annual rate (SAAR) of 440 thousand.

January sales were revised down from 468 thousand to 455 thousand, and December sales were revised up from 427 thousand to 441 thousand (November was revised up slightly too).  

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 February 2014 were at a seasonally adjusted annual rate of 440,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 3.3 percent below the revised January rate of 455,000 and is 1.1 percent below the February 2013 estimate of 445,000.
New Home SalesClick on graph for larger image in graph gallery.

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 increased in February to 5.2 months from 5.0 months in January.

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 February was 189,000. This represents a supply of 5.2 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 still low, but moving up. The combined total of completed and under construction is also very low.

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

In February 2014 (red column), 35 thousand new homes were sold (NSA). Last year 36 thousand homes were also sold in February. The high for February was 109 thousand in 2005, and the low for February was 22 thousand in 2011.

New Home Sales, NSA

This was at expectations of 440,000 sales in February.

I'll have more later today . 

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