Friday, August 23, 2019

New Home Sales decreased to 635,000 Annual Rate in July, Sales in June revised up to New Cycle High

by Calculated Risk on 8/23/2019 10:15:00 AM

The Census Bureau reports New Home Sales in July were at a seasonally adjusted annual rate (SAAR) of 635 thousand.

The previous three months were revised up combined.  June was revised up to a new cycle high.

"Sales of new single‐family houses in July 2019 were at a seasonally adjusted annual rate of 635,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.8 percent below the revised June rate of 728,000, but is 4.3 percent above the July 2018 estimate of 609,000."
emphasis added
New Home SalesClick 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 over the last several years, new home sales are still somewhat low historically.

The second graph shows New Home Months of Supply.

New Home Sales, Months of SupplyThe months of supply increased in July to 6.4 months from 5.5 months in June.

The all time record was 12.1 months of supply in January 2009.

This is at the top of the normal range (less than 6 months supply is normal).
"The seasonally‐adjusted estimate of new houses for sale at the end of July was 337,000. This represents a supply of 6.4 months at the current sales rate."
New Home Sales, InventoryOn 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 somewhat low, and the combined total of completed and under construction is close to normal.

New Home Sales, NSAThe last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).

In July 2019 (red column), 53 thousand new homes were sold (NSA). Last year, 52 thousand homes were sold in July.

The all time high for July was 117 thousand in 2005, and the all time low for July was 26 thousand in 2010.

This was slightly below expectations of 645 thousand sales SAAR, however sales in the three previous months were revised up, combined.  I'll have more later today.