by Bill McBride on 9/24/2015 10:19:00 AM
Thursday, September 24, 2015
The Census Bureau reports New Home Sales in August were at a seasonally adjusted annual rate (SAAR) of 552 thousand.
The previous three months were revised down by a total of 8 thousand (SA).
"Sales of new single-family houses in August 2015 were at a seasonally adjusted annual rate of 552,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 5.7 percent above the revised July rate of 522,000 and is 21.6 percent above the August 2014 estimate of 454,000"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 since the bottom, new home sales are still fairly low historically.
The second graph shows New Home Months of Supply.
The months of supply decreased in August to 4.7 months.
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 August was 216,000. 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.
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 August 2015 (red column), 46 thousand new homes were sold (NSA). Last year 36 thousand homes were sold in August. This is the highest for August since 2007.
The all time high for August was 110 thousand in 2005, and the all time low for August was 23 thousand in 2010.
This was well above expectations of 516,000 sales in August, and new home sales are on pace for solid growth in 2015. I'll have more later today.
Posted by Bill McBride on 9/24/2015 10:19:00 AM