Today the Census Bureau reported that 555K new homes sold in December 2016. Sales for the previous month were revised to 535K. On a year over year basis sales are up 5.6%
New Home Sales Sales of new single-family houses in January 2017 were at a seasonally adjusted annual rate of 555,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 3.7 percent (±18.5 percent)* above the revised December rate of 535,000 and is 5.5 percent (±25.4 percent)* above the January 2016 estimate of 526,000.
For Sale Inventory and Months’ Supply The seasonally-adjusted estimate of new houses for sale at the end of January was 265,000. This represents a supply of 5.7 months at the current sales rate.
We now have nearly 6 months of inventory, and in fact have the highest inventory since September of 2009. But sales numbers are dependent on demand more than inventory.
For 2017 I expect only, 4%-7% growth, so the current sales numbers look about right to me. We are still heading to a cycle high in demand. The national housing market is a battle between new and existing homes. Existing homes are remarkably cheaper than new homes and have the advantage of being geographically dispersed instead of clustered into new developments. New home sales still have legs to rise as we were working from the lowest levels ever recorded in U.S. history. We have over 165 million Americans working, unemployment claims are low, job openings are over 5.5 million, so breaking over 600,000 total new homes sales in the next 2 years isn’t a stretch by any means.
The trend of slow and steady growth continues. New home sales should hit cycle highs in demand in 2017 .
Still the most bullish housing data I’ve seen shows that median new home sales price hasn’t gone anywhere for some time. This implies more smaller priced homes are coming to the market and this is exactly what you need for more growth from these low levels
Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing market. Logan 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