In Depth Analysis: CalculatedRisk Newsletter on Real Estate (Ad Free) Read it here.

Wednesday, October 27, 2010

New Home Sales increased slightly in September, still near record low

by Calculated Risk on 10/27/2010 10:00:00 AM

The Census Bureau reports New Home Sales in September were at a seasonally adjusted annual rate (SAAR) of 307 thousand. This is slightly higher than in August (288 thousand SAAR).

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 or annualized).

Note the Red columns for 2010. In September 2010, 24 thousand new homes were sold (NSA). This is a new record low for September.

The previous record low for the month of September was 28 thousand in 1981; the record high was 95 thousand in September 2005.

New Home Sales and Recessions The second graph shows New Home Sales vs. recessions for the last 47 years. The dashed line is the current sales rate.

Sales of new single-family houses in September 2010 were at a seasonally adjusted annual rate of 307,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.6 percent (±16.9%)* above the revised August rate of 288,000, but is 21.5 percent (±13.3%) below the September 2009 estimate of 391,000.
And another long term graph - this one for New Home Months of Supply.

New Home Months of Supply and RecessionsMonths of supply decreased to 8.0 in September from 8.6 in August. The all time record was 12.4 months of supply in January 2009. This is still high (less than 6 months supply is normal).
The seasonally adjusted estimate of new houses for sale at the end of September was 204,000. This represents a supply of 8.0 months at the current sales rate.
New Home Sales Inventory The final graph shows new home inventory.

The 307 thousand annual sales rate for September is just above the all time record low in May (282 thousand). This was the weakest September on record.

New home sales are important for the economy and jobs - and this indicates that residential investment will be a sharp drag on GDP in Q3.