In my 2017 Housing Prediction article published in December 2016, I wrote this regarding new home sales:
” For 2017, I predict 4%-7% growth, if the positive trend of builders offering smaller homes continue then we can have much more growth in sales in 2017″
Today, the Census Bureau reported that new home sales missed estimates coming in at 560,000. With this latest report, new home sales continue their path of slow and steady growth with year to date sales running at a positive 7.5% clip.
August ‘17 new home sales were 560,000 (SAAR), down 3.4% from July ‘17 and down 1.2% from August ‘16 https://go.usa.gov/xRuXF
New Home Sales:
Sales of new single-family houses in August 2017 were at a seasonally adjusted annual rate of 560,000,
according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and
Urban Development. This is 3.4 percent (±13.0 percent)* below the revised July rate of 580,000 and is 1.2
percent (±18.5 percent)* below the August 2016 estimate of 567,000.
The median sales price of new houses sold in August 2017 was $300,200. The average sales price was
For Sale Inventory and Months’ Supply:
The seasonally-adjusted estimate of new houses for sale at the end of August was 284,000. This represents
a supply of 6.1 months at the current sales rate
A few points of note on this report: We now have 6 months plus of inventory. For the last several years many housing analysts have held that demand for housing was being held back by low inventory. We have seen housing economist in 2017 use terms such as “Record Breaking Demand” ,“All Demand No Supply”, “Inescapable Appetite” to describe housing demand.
From Calculated Risk:
The report released today marked the first time since July of 2014 that inventory has reached over 6 month supply but we still haven’t had a single year with over closed total 600,000 new homes sold – even with over 154,000,000 people working, mortgage rates below 5% since early 2011 and higher monthly supply in this cycle that the previous cycle with a very long economic expansion cycle.
The report also showed that the median sales price fell. If the median sales price doesn’t explode higher, like it did in the earlier part of the economic cycle, we can expect improved growth in new homes.
Next month’s report for sales of both new and existing homes, should show the full impact of the Hurricanes – so any dips can be considered to be short-term. Keep in mind, however that the slight slowdown for homes sales started well before the Hurricanes. Both existing home sales for 2017 look exactly as I expected and are at cycle highs still. Anyone disappointed with the housing data in 2017 had unrealistic expectations for the year.
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