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

Tuesday, May 25, 2021

A few Comments on April New Home Sales

by Calculated Risk on 5/25/2021 12:16:00 PM

New home sales for April were reported at 863,000 on a seasonally adjusted annual rate basis (SAAR). Sales for the previous three months were revised down significantly, combined.

This was well below consensus expectations for April, but still the highest sales rate for April since 2007.

However, sales were in line with home builder comments about "limiting sales" in April and May mostly due to high material costs.

Still, sales have been strong for the last 11 months.  Clearly low mortgages rates, low existing home supply, and favorable demographics have boosted sales.  A surging stock market has probably helped new home sales too.

Earlier: New Home Sales Decrease to 863,000 Annual Rate in April.

New Home Sales 2018 2019Click on graph for larger image.

This graph shows new home sales for 2020 and 2021 by month (Seasonally Adjusted Annual Rate).

The year-over-year comparisons are easy in the first half of 2021 - especially in March and April.

However, sales will likely be down year-over-year in August through October - since the selling season was delayed in 2020.

And on inventory: note that completed inventory (3rd graph in previous post) is near record lows, but inventory under construction is closer to normal.

New Home Sales, Months by Stage of ConstructionThis graph shows the months of supply by stage of construction.

The inventory of completed homes for sale was at 36 thousand in April, just above the record low of 34 thousand in March 2021. That is about 0.5 months of completed supply (just above record low).

The inventory of new homes under construction, and not started, is at 3.9 months - close to normal.