Slow & Steady For New Home Sales

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Today the Census Bureau reported that 610,000 new homes were sold and the year over year growth came in at 9.1%. The revisions this month were slightly negative after the positive revisions from last month’s report. However, the major story for this month is that the median sales price blimp that we saw last month has come back down to where slower pace trend we have seen since late 2014. This is important because to sustain more new home sales growth we will need median sales prices to cool down. This trend shows more smaller price homes in the mix and we can use a lot more supply of smaller priced homes.

From Fred:
https://fred.stlouisfed.org/series/MSPNHSUS

July Median sales price

From Doug Short:
https://www.advisorperspectives.com/dshort/updates/2017/07/26/june-new-home-sales-inches-up

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June ‘17 new home sales 610,000 (SAAR), up 0.8% from May ‘17 and up 9.1% from June ‘16

New Home Sales:
Sales of new single-family houses in June 2017 were at a seasonally adjusted annual rate of 610,000,
according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and
Urban Development. This is 0.8 percent (±12.1 percent)* above the revised May rate of 605,000 and is 9.1
percent (±14.4 percent)* above the June 2016 estimate of 559,000.

Sales Price:
The median sales price of new houses sold in June 2017 was $310,800. The average sales price was
$379,500.

For Sale Inventory and Months’ Supply:
The seasonally-adjusted estimate of new houses for sale at the end of June was 272,000. This represents a
supply of 5.4 months at the current sales rate

New home sales are still very low historically. Due to this fact, sales still have legs for more growth.

From Doug Short
https://www.advisorperspectives.com/dshort/updates/2017/07/26/june-new-home-sales-inches-up

July New Home Sales

Next month’s report will have the hardest year over year comps to work against with. I wouldn’t read too much into it if we had a negative year over year print for next month.

From Calculated Risk
http://www.calculatedriskblog.com/2017/07/a-few-comments-on-june-new-home-sales.html

BILL NEW HOME

The monthly supply chart hasn’t changed too much. We have always had higher monthly supply in this cycle than in the previous one.

From Fred:
https://fred.stlouisfed.org/series/MSACSR

JULY Monthly SUPPLY New Homes

The best thing about this report is that  the median sales price for new homes came back down.  For more unit sales growth to occur we need more smaller priced homes as part of the mix.

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