by Bill McBride on 11/26/2014 10:00:00 AM
Wednesday, November 26, 2014
The Census Bureau reports New Home Sales in October were at a seasonally adjusted annual rate (SAAR) of 458 thousand.
September sales were revised down from 467 thousand to 455 thousand, and August sales were revised down from 466 thousand to 453 thousand.
"Sales of new single-family houses in October 2014 were at a seasonally adjusted annual rate of 458,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.7 percent above the revised September rate of 455,000 and is 1.8 percent above the October 2013 estimate of 450,000."Click on graph for larger image.
The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.
Even with the increase in sales over the previous two years, new home sales are still close to the bottom for previous recessions.
The second graph shows New Home Months of Supply.
The months of supply increased in October to 5.6 months from 5.5 months in September.
The all time record was 12.1 months of supply in January 2009.
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 October was 212,000. This represents a supply of 5.6 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.
The third graph shows the three categories of inventory starting in 1973.
The inventory of completed homes for sale is still low, and the combined total of completed and under construction is also low.
The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).
In October 2014 (red column), 37 thousand new homes were sold (NSA). Last year 36 thousand homes were sold in October. This was the best October since 2007.
The high for October was 105 thousand in 2005, and the low for October was 23 thousand in 2010.
This was below expectations of 470,000 sales in October, and there were downward revisions to sales in July, August and September.
I'll have more later today.