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December 2018 Headline New Home Sales Improved


Despite the positive headlines, year-over-year growth remains in contraction.

Median and average new home prices improved, but so did the supply of unsold new homes at the current sales rate.

Hopefully this month marks the beginning of an improvement trend, and not a pause in the downward trend of new home sales.

The headlines say new home sales improved but remained in contraction. Median and average sales prices improved - but the backlog of unsold homes grew.

This month the backward revisions were sometimes significantly downward. Because of weather and other factors, the rolling averages are the way to view this series. The rolling averages improved but remain deep in contraction.

This data series is suffering from methodology issues which manifest as significant backward revision. Home sales move in spurts and jumps - so this is why we view this series using a three month rolling average.

Econintersect analysis:

  • unadjusted sales growth accelerated 10.1 % month-over-month.
  • unadjusted year-over-year sales was NEGATIVE 2.2 % year-over-year.
  • three month unadjusted trend rate of growth accelerated 1.7 % month-over-month - is down 9.1 % year-over-year.

US Census Headlines:

  • seasonally adjusted sales up 3.7% month-over-month
  • seasonally adjusted year-over-year sales down 2.4 %
  • market expected (from Econoday) seasonally adjusted annualized sales of 550 K to 649 K (consensus 591 K) versus the actual at 621 K.

The quantity of new single family homes for sale remains well below historical levels.

Seasonally Adjusted New Homes for Sale

The headlines of the data release:

Sales of new single‐family houses in December 2018 were at a seasonally adjusted annual rate of 621,000, 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 (plus/minus 16.4 percent)* above the revised November rate of 599,000, but is 2.4 percent (plus/minus 21.3 percent)* below the December 2017 estimate of 636,000.

Unadjusted New Home Sales Monthly Volumes In Thousands

The median sales price of new houses sold in December 2018 was $318,600. The average sales price was $377,000.

Unadjusted Median New Home Sales Price

The seasonally‐adjusted estimate of new houses for sale at the end of December was 344,000. This represents a supply of 6.6 months at the current sales rate.

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