Before we get into today’s new home sales report, I would like to kindly remind every living human being in America that the monthly supply of inventory for new homes has been higher every month in this cycle,compared to the last one – despite what you may have heard to the contrary. Some people like to ice skate up hill.
Today we saw excellent revisions to the new home sales numbers in the previous reports. Inventory fell from 5.4 months to 5.2 months, which is still higher than I expected with better sales data. When new home sales were much higher in the past cycle, monthly inventory was lower in the previous cycle as well.
New Home Sales:
Sales of new single-family houses in March 2018 were at a seasonally adjusted annual rate of 694,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.0 percent (±18.6 percent)* above the revised February rate of 667,000 and is
8.8 percent (±17.0 percent)* above the March 2017 estimate of 638,000.
The median sales price of new houses sold in March 2018 was $337,200. The average sales price was
For Sale Inventory and Months’ Supply:
The seasonally-adjusted estimate of new houses for sale at the end of March was 301,000. This represents a supply of 5.2 months at the current sales rate.
New home sales are tracking at 10.3% growth year to date, which is much better than the 2%-5% I expected for 2018. So far the revision trends are positive. This is a good sign for the year. The 10-year yield did touch 3% today and unless oil takes off toward $85 I believe this is the high-end of the range for rates. Purchase application data has been positive every single week, on a YoY basis, this year for existing home sales while cash buyers have been falling. The marketplace is holding up well with higher rates and higher home prices. Even so, I am still sticking to my prediction of flat to negative sales growth for existing home sales.
Solid Existing Home Sales Report
The same story for new home sales continues — slow and steady growth from a very low-level. Growth in new home sales need to be considered in the context of our long economic expansion with over 155,000,000 people working and mortgage rates under 5% since early 2011.
From Doug Short:
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
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