by Calculated Risk on 11/26/2019 10:14:00 AM
Tuesday, November 26, 2019
The Census Bureau reports New Home Sales in October were at a seasonally adjusted annual rate (SAAR) of 733 thousand. Sales for September were revised up to a new cycle high of 738 thousand SAAR.
The previous three months were revised up, combined.
"Sales of new single‐family houses in October 2019 were at a seasonally adjusted annual rate of 733,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.7 percent below the revised September rate of 738,000, but is 31.6 percent above the October 2018 estimate of 557,000."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 over the last several years, new home sales are still somewhat low historically.
The second graph shows New Home Months of Supply.
The months of supply increased in October to 5.3 months from 5.2 months in September.
The all time record was 12.1 months of supply in January 2009.
This is 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 322,000. This represents a supply of 5.3 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 somewhat low, and the combined total of completed and under construction is close to normal.
The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).
In October 2019 (red column), 57 thousand new homes were sold (NSA). Last year, 43 thousand homes were sold in October.
The all time high for September was 105 thousand in 2005, and the all time low for October was 23 thousand in 2010.
This was well above expectations of 707 thousand sales SAAR, and sales in the three previous months were revised up, combined. I'll have more later today.