Friday, April 24, 2009

New Home Sales: 356 Thousand SAAR in March

by Calculated Risk on 4/24/2009 10:00:00 AM

The Census Bureau reports New Home Sales in March were at a seasonally adjusted annual rate (SAAR) of 356 thousand. This is slightly below the upwardly revised rate of 358 thousand in February.

New Home Sales Monthly Not Seasonally Adjusted Click on graph for larger image in new window.

The first graph shows monthly new home sales (NSA - Not Seasonally Adjusted).

Note the Red columns for 2009. This is the lowest sales for March since the Census Bureau started tracking sales in 1963. (NSA, 34 thousand new homes were sold in March 2009; the previous low was 36 thousand in March 1982).

As the graph indicates, sales in March 2009 are substantially worse than the previous years.

New Home Sales and Recessions The second graph shows New Home Sales vs. recessions for the last 45 years. New Home sales have fallen off a cliff.

Sales of new one-family houses in March 2009 were at a seasonally adjusted annual rate of 356,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

This is 0.6 percent (±19.0%)* below the revised February rate of 358,000 and is 30.6 percent (±10.7%) below the March 2008 estimate of 513,000.
And one more long term graph - this one for New Home Months of Supply.

New Home Months of Supply and RecessionsThere were 10.7 months of supply in March - significantly below the all time record of 12.5 months of supply set in January.
The seasonally adjusted estimate of new houses for sale at the end of March was 311,000. This represents a supply of 10.7 months at the current sales rate.
New Home Sales Inventory The final graph shows new home inventory.

Note that new home inventory does not include many condos (especially high rise condos), and areas with significant condo construction will have much higher inventory levels.

Although sales were at a March record low, there are positives in this report - especially considering the upward revisions for previous months. It appears the months-of-supply has peak, and there is a reasonable chance that new home sales has bottomed for this cycle - however any recovery in sales will be modest because of the huge overhang of existing homes for sale. I'll have more soon.