Wednesday, July 24, 2019

A few Comments on June New Home Sales

by Calculated Risk on 7/24/2019 10:47:00 AM

New home sales for June were reported at 646,000 on a seasonally adjusted annual rate basis (SAAR). Sales for the previous three months were revised down.

This was the highest sales for June since June 2007, and annual sales in 2019 should be the best year for new home sales since 2007.

Earlier: New Home Sales increased to 646,000 Annual Rate in June.

New Home Sales 2017 2018Click on graph for larger image.

This graph shows new home sales for 2018 and 2019 by month (Seasonally Adjusted Annual Rate).

Sales in June were up 4.5% year-over-year compared to June 2018.

Year-to-date (through June), sales are up 2.2% compared to the same period in 2018.

This comparison was the most difficult in the first half of 2018, so this is a solid first half for 2019.

And here is another update to the "distressing gap" graph that I first started posting a number of years ago to show the emerging gap caused by distressed sales.

Distressing GapThe "distressing gap" graph shows existing home sales (left axis) and new home sales (right axis) through June 2019. This graph starts in 1994, but the relationship had been fairly steady back to the '60s.

Following the housing bubble and bust, the "distressing gap" appeared mostly because of distressed sales.

Even though distressed sales are down significantly, following the bust, new home builders focused on more expensive homes - so the gap has only closed slowly.

I still expect this gap to close.   However, this assumes that the builders will offer some smaller, less expensive homes.

Note: Existing home sales are counted when transactions are closed, and new home sales are counted when contracts are signed. So the timing of sales is different.