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Tuesday, August 23, 2022

New Home Sales Decrease Sharply to 511,000 Annual Rate in July

by Calculated Risk on 8/23/2022 10:09:00 AM

The Census Bureau reports New Home Sales in July were at a seasonally adjusted annual rate (SAAR) of 511 thousand.

The previous three months were revised down slightly, combined.

Sales of new single‐family houses in July 2022 were at a seasonally adjusted annual rate of 511,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.6 percent below the revised June rate of 585,000 and is 29.6 percent below the July 2021 estimate of 726,000.
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.

New home sales are now well below pre-pandemic levels.

The second graph shows New Home Months of Supply.

New Home Sales, Months of SupplyThe months of supply increased in July to 10.9 months from 9.2 months in June.

The all-time record high was 12.1 months of supply in January 2009. The all-time record low was 3.5 months, most recently in October 2020.

This is well above the top of the normal range (about 4 to 6 months of supply is normal).
"The seasonally‐adjusted estimate of new houses for sale at the end of July was 464,000. This represents a supply of 10.9 months at the current sales rate."
New Home Sales, NSAThe last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).

In July 2022 (red column), 42 thousand new homes were sold (NSA). Last year, 62 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 well below expectations, and sales in the three previous months were revised down slightly, combined. I'll have more later today.