by Bill McBride on 11/23/2016 10:11:00 AM
Wednesday, November 23, 2016
The Census Bureau reports New Home Sales in October were at a seasonally adjusted annual rate (SAAR) of 563 thousand.
The previous three months were revised down by a total of 34 thousand (SAAR).
"Sales of new single-family houses in October 2016 were at a seasonally adjusted annual rate of 563,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.9 percent below the revised September rate of 574,000, but is 17.8 percent above the October 2015 estimate of 478,000"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 increased in October to 5.2 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 October was 246,000. 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.
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 2016 (red column), 45 thousand new homes were sold (NSA). Last year, 39 thousand homes were sold in October. This was the highest sales for October since 2007.
The all time high for October was 105 thousand in 2005, and the all time low for October was 23 thousand in 2010.
This was below expectations of 590,000 sales SAAR in October. I'll have more later today.
Posted by Bill McBride on 11/23/2016 10:11:00 AM