2016 New Home Sales Report Card

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Today the Census Bureau reported that 592K new homes sold in November 2016. Sales for the previous month were revised downward to 563K.

“Sales of new single-family houses in November 2016 were at a seasonally adjusted annual rate of 592,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 5.2 percent (±14.1%)* above the revised October rate of 563,000 and is 16.5 percent (±19.3%)* above the November 2015 estimate of 508,000.”

Sales of new single-fam houses in November 2016 were $592K (SAAR), up 5.2 percent (+/- 14.1%)* from October.

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For 2016,my outlook was that new home sales would grow 4%-8% but if median new home sales prices don’t go anywhere, much more growth could be had.  This is exactly what has been happening for some time now. This is a very bullish data, as it implies more smaller priced homes are coming into the mix. For 2015 and 2016 this has been my main theme for new home sales growth and it has played out very nicely.

From Doug Short:

https://www.advisorperspectives.com/dshort/updates/2016/12/23/november-new-home-sales-up-5-2-mom-surprises-expectations

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Overall I give New Homes Sales for 2016 a grade of B 85%. We saw both growth in sales numbers and a fall in the median sales price. However, as always with new home sales,  a historical perspective is needed to understand the data. The growth in this cycle is still the weakest ever recorded in U.S. history. We are seeing growth because previous years sales were so low.  Slow and steady growth was my call for all these years.  If we start a year with 675K-775K in sales then we can claim that the low bar is done with.  We are still 2-3 years away from that reality, at best.

From Doug Short:
https://www.advisorperspectives.com/dshort/updates/2016/12/23/november-new-home-sales-up-5-2-mom-surprises-expectations
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Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing marketLogan Mohtashami is a senior loan officer at AMC Lending Group,  which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data  daily on his own facebook page https://www.facebook.com/Logan.Mohtashami