The Census Bureau reports New Home Sales in August were at a seasonally adjusted annual rate (SAAR) of 629 thousand.
The previous three months were revised down singnificantly.
“Sales of new single-family houses in August 2018 were at a seasonally adjusted annual rate of 629,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 3.5 percent above the revised July rate of 608,000 and is 12.7 percent above the August 2017 estimate of 558,000. “
The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.
Even with the increase in sales over the last several years, new home sales are still somewhat low historically.
The second graph shows New Home Months of Supply.
The all time record was 12.1 months of supply in January 2009.
This is at the top of the normal range (less than 6 months supply is normal).
“The seasonally-adjusted estimate of new houses for sale at the end of August was 318,000. This represents a supply of 6.1 months at the current sales rate.”
On inventory, according to the Census Bureau:
“A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted.”
Starting in 1973 the Census Bureau broke this down into three categories: Not Started, Under Construction, and Completed.
The third graph shows the three categories of inventory starting in 1973.
The inventory of completed homes for sale is still somewhat low, and the combined total of completed and under construction is also somewhat low.
In August 2018 (red column), 53 thousand new homes were sold (NSA). Last year, 45 thousand homes were sold in August.
The all time high for August was 110 thousand in 2005, and the all time low for August was 23 thousand in 2010.
This was close to expectations of 630,000 sales SAAR, however the previous months were revised down significantly. I’ll have more later today.