Don’t Miss a Post. Subscribe now.

New Home Sales Jump 10.7 Percent in Big Upward Surprise

June 24, 2022

•

6:32 pm

•

52 comments

•

Economics

New home sales data from commerce department, chart by Mish

The Commerce Department’s New Residential Sales report for May is a big upward surprise.

New Home Sales Sales

Sales of new single‐family houses in May 2022 were at a seasonally adjusted annual rate of 696,000,
This is 10.7 percent above the revised April rate of 629,000, but is 5.9 percent below the May 2021 estimate of 740,000.

Sales Price

The median sales price of new houses sold in May 2022 was $449,000. The average sales price was $511,400.

For Sale Inventory and Months’ Supply

The seasonally‐adjusted estimate of new houses for sale at the end of May was 444,000.
This represents a supply of 7.7 months at the current sales rate.

Supply

The supply figures are very distorted. The Census Department counts as “supply” homes not even under construction yet.

New Homes for Sale by Stage of Construction

Of the purported 444,000 homes for sale, only 37,000 are actually built. Another 294,000 have at least started.

115,000 new homes for sale have not broken ground yet.

Does This Change Anything?

Although this was a big surprise, even to me, a quick look at the lead chart shows this surge does not change the picture.

All the rest of the data on existing home sales, retail sales, manufacturing PMI, has been dismal.

Here’s a couple of new Tweet to consider.

https://twitter.com/FreightAlley/status/1540394918505504771 https://twitter.com/FreightAlley/status/1540377829485019137

In terms of activity, existing home sales dwarf new home sales in activity. On June 21, I noted Existing Home Sales Skid Another 3.4 Percent in May, Down Fourth Month

Existing-home sales fell for the fourth straight month to a seasonally adjusted annual rate of 5.41 million.
Sales are down 16.8 percent since January.

Yesterday, I noted US Manufacturing Output Contracts For First time Since 2020, Service Growth Dramatically Slows

Trucking signals a major contraction.

A single data point on new home sales does not change anything. I’ve Seen Enough, the US is in Recession Now, Q&A on Why

This post originated at MishTalk.Com.

Thanks for Tuning In!

Please Subscribe to MishTalk Email Alerts.

Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.

If you have subscribed and do not get email alerts, please check your spam folder.

Mish

Subscribe to MishTalk Email Alerts.

Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.

This post originated on MishTalk.Com

Thanks for Tuning In!

Mish

Comments to this post are now closed.

52 Comments

Newest

Oldest Most Voted

JeffD

4 years ago

Completed homes for sale points to the lowest inventory ever. All the rest is noise.

david halte

4 years ago

Likely these are mostly cash buyers, not influenced by rates. Home prices continue to skyrocket in select locations. Owners sell into the inflated value and move to new less expensive areas, banking the difference. Many have benefited to the extent of early retirement (the FIRE blogs). Statistics indicate 20 percent are institutional investors. And some are retail investors titling their home in a trust.

The intent of the Fed’s ZIRP was to inflate home values. The increase in price gives homeowners a sense of wealth and promotes spending. Even though the Fed marginally raised rates, spiraling economic inflation continues to increase home values. Average household wealth increases – spending (borrowing the home’s equity) and inflation continues. One year average home prices increased $29K in 2021, and another $50K in 2022, a 20 percent rise. The $4K cost of household inflation per year doesn’t create the demand destruction that is speculated.

To halt the inflation cycle, the Fed’s policies need to walk back the increase in home values. Particularly the last few years of pandemic price increases.

Six000mileyear

4 years ago

I’m surprised new home sales showed and increase while existing homes have declined. The explanation may be as simple as wealthy investors sold stock and crypto-currencies to pay for those new houses.

xbizo

4 years ago

In California, older trucks are basically worthless as of this year due to CARB regulations taking effect. They are shipped out of state. Likely depressing the used truck market in the West U.S.

Of course, a number of small freight companies are going out of business as they can’t replace three trucks at $120K each with the new diesel engines. More of California’s war on small business. Only bigger business can handle the burden.

Since2008

4 years ago

We start with an economic topic and then we degenerate into G-A-R-B-A-G-E.

What happened to Fed Watcher, Thudston the 3rd, and… Well… I know what happened to Black Swan.

Sigh…

BamMan can you rescue this beforr njbr shows up again?

PapaDave

4 years ago

Reply to Since2008

Its because of all the politics that people can’t focus on the economics. Both sides want to blame each other for everything.

Thank goodness there are a few people here who want to focus on economics and investing instead of the political blame game.

MPO45

4 years ago

Reply to PapaDave

And since many are boomers you would think they would have learned after 50 years that no politician has made anything better over the last 10 election cycles. Everyone needs to take care of their own needs in their own ways, the people that do that end up rich, the ones that cry and whine end up posting nonsense political commentary. It’s very telling and eye rolling but I weed thru it anyway.

PapaDave

4 years ago

Reply to MPO45

Agree.

JRM

4 years ago

Isn’t the commerce dept currently run by DEMOCATS??

Making it possibly “PROPAGANDA” to try to give Biden a “BOOST”!!!!

prumbly

4 years ago

Everyone and their cat now expects inflation to drop soon – and with it interest rates – once we vote out the current jokers in Washington and investing in energy development can restart. Buy your home now, refi later.

Fish1

4 years ago

Reply to prumbly

Yeah, get ‘‘em out. We’ll all be living in the Handmaid’s Tale. Under the eye ya know. Crazies.

MPO45

4 years ago

No real surprise to me, I still can’t find rental properties to buy…still waiting and waiting and waiting even though mortgage rates keep going up.

I have seen those big ads, I think one of them was for Walmart and it was a huge vertical ad with huge fonts. Probably a glitch somewhere.

Mish

4 years ago

Regarding Full Screen ads.

Do not believe I have them. Rather, I think it is some artifact of ad-blockers not behaving properly.

Anyone seen a full screen ad?

From the Maven:

Hello Mike,

We worked on this Ad Blocking issue, but believe it to be resolved. I am unable
to repro, can you?

Doug78

4 years ago

Reply to Mish

Not me. Never have seen one.

TexasTim65

4 years ago

Reply to Mish

Nope, but I run Adblock plus on my PC.

Just tried on another machine with stock Chrome browser and no full screen ads.

Also tried on my Samsung phone that uses Chrome and it’s OK there too.

Hmm, just tried in the default Samsung browser on on my Phone. That browser seems to zoom in everything on your site as all the text is much larger than Chrome. There the ads do take up 90% of my screen space when I scroll up/down and it takes a lot longer to scroll down through an article. It’s at the default zoom level for that browser (ie I can’t zoom in). Maybe that person is using the Samsung default browser and not Chrome?

Mish

4 years ago

Reply to TexasTim65

Thanks!

LostNOregon

4 years ago

Reply to Mish

I get them using Chrome. I installed Adblock Plus for Samsung Internet yesterday and it has completely stopped full page ads.

Scooot

4 years ago

Reply to Mish

No, I don’t get them. I’m using Safari mostly on an iPad.

Casual_Observer2020

4 years ago

As of today the economy is no longer the chief issue for all future elections until further notice.

Mish

4 years ago

Reply to Casual_Observer2020

I doubt it, but the Supreme Court 5-4 ruling certainly helps Democrats

TexasTim65

4 years ago

Reply to Mish

Wasn’t it a 6-3 ruling?

What’s really interesting is that the Dems control all 3 houses so Congress could introduce a bill to legalize abortion across the country (something the court suggested is needed). But they aren’t even talk about it. Why? Because they need this issue to remain ‘forever’ in order to drive voting turnout.

Casual_Observer2020

4 years ago

Reply to Mish

Let’s wait and see. Trump has said this ruling will turn voters against Republicans. I predict huge turnout in midterms akin to 2018.

JRM

4 years ago

Reply to Casual_Observer2020

Where did you see this statement, on one of the MSM who blatantly lies about what Trump says???

I betting you will see the number of babies up for adaption to rise in many red states!!!

This still allows abortions in MARXIST run states!!!

TexasTim65

4 years ago

Reply to Casual_Observer2020

Definitely the Democrats plan to cling to this as a lifeline and want to make the midterms all about Roe vs Wade. The problem is the average family right now cares about the economy and inflation and if/when those are solved, then maybe they’ll be ready to get to Roe vs Wade (assuming anything really changes for most voters).

If Democrats truly cared about abortion access they’d quickly pass something through congress while they hold all 3 houses. But they won’t because they need it to drive voter turnout.

LM2022

4 years ago

Reply to TexasTim65

What 3 houses are you talking about?

Also if the average family is concerned about the economy and inflation, maybe they’ll see that forcing women to carry pregnancies to term that they can’t afford to raise is a bad idea.

TexasTim65

4 years ago

Reply to LM2022

Congress, Senate, Presidency. Not really houses per say but presumably you get what I mean.

Most of the pro-life crowd is strongly religious. They don’t care whether you can afford it or not. In their world view, it’s Gods will and abortion is a sin and that’s far more important than earthly matters like affording things. The problem is you can’t argue with someone’s divine beliefs.

Doug78

4 years ago

Reply to TexasTim65

Most people aren’t very religious but they do care about the moral aspects of aborting after certain times. It becomes very uncomfortabe.

prumbly

4 years ago

Reply to LM2022

With the US now being a welfare state there is no such thing as not being able to afford to raise a child. Women need to man-up and take responsibility.

Casual_Observer2020

4 years ago

Reply to TexasTim65

They can’t pass anything because it takes 60 votes in the senate. Are you really dumb ?

TexasTim65

4 years ago

Reply to Casual_Observer2020

You assume 100% of Republicans wouldn’t vote for it. You might be surprised as not all Republicans are religious zealots.

I know lots of Republicans who are ok with abortions and are merely fiscally conservative.

prumbly

4 years ago

Reply to TexasTim65

You don’t have to be a religious zealot to think that abortion is wrong. Just having morals will do.

Doug78

4 years ago

Reply to Casual_Observer2020

The issue will move to what date will abortions be allowed. Where is the cut off point? That is the real sticky issue in my opinion.

Casual_Observer2020

4 years ago

Reply to Doug78

26 states have full bans that trigger due to overturning Roe.

Doug78

4 years ago

Reply to Casual_Observer2020

And those triggers will be challeged and those challenges will have to be debated and voted upon. That is something that some people desperately want not to happen so as to keep it a hot issue. California wrote Wade into state law. Others might follow or not but the decision will be confirmed by state vote as it should be.

MPO45

4 years ago

Reply to Casual_Observer2020

You may be right. There is talk of women all walking out of work and going on strike. I guess if that happens we’ll finally get demand destruction and more inflation. Talk about crazy times. The only question now is how to profit from this fiasco.

PapaDave

4 years ago

Reply to MPO45

I get the demand destruction. But why more inflation?

MPO45

4 years ago

Reply to PapaDave

Less workers means less production. Less production means scarcity. I should have caveat that and said inflation in some goods and services if there is a huge labor walk out. For example, if women make up 20% of the workforce at GM and they walk out then GM will have less production. I made that number up, I don’t know how many women work where in any particular industry but you get the picture.

PapaDave

4 years ago

Reply to MPO45

A widespread walkout by women sounds deflationary to me as it would dramatically slow the economy.

Billy

4 years ago

I’m finding that everyone has a different meaning of recession. Therefore, if we are in a recession depends on if you are a pessimist, an optimist or delusional. You know you’re delusional if you claim to be an Independent and have voted the same way over the past 5 elections.

PapaDave

4 years ago

Reply to Billy

My favorite definition is: A recession is when your friends and acquaintances lose their jobs. A depression is when “you” lose your job.

Casual_Observer2020

4 years ago

Home sales are still a tax loophole and good for money laundering. People with money to launder continue to buy more homes.

FromBrussels

4 years ago

Life is fn great ain t it……? We re either going to be annihilated financially,ecologically , by solar flares even, ….or by nuclear war, the latter being the most likely outcome in the near future, the way things are evolving anyway, on a dramatically overpopulated planet …

PapaDave

4 years ago

Reply to FromBrussels

Life “is” great. As long as you avoid or ignore the overly pessimistic who try to drag you down with them.

Robbyrob

4 years ago

Reply to FromBrussels

Life has become better, comrades, life has become more cheerful

Stalin 1935

dtj

4 years ago

I was reading mortgage applications are up. Kind of a dead cat bounce. In my area, things were still frenzied up until about a month ago. Then all of a sudden 2-3 weeks ago it did a 180.

Current prices are based on 3% mortgage rates, not 6% rates. Anyone buying now is buying at the tippety top.

shamrock

4 years ago

Nothing goes straight down. I’m surprised no mention of the average price (it was down nearly 10%).

PapaDave

4 years ago

Reply to shamrock

Inflation is coming down hard already! Except for food and energy.

Lisa_Hooker

4 years ago

Reply to PapaDave

Great! Good thing I don’t eat or have to cool/heat my house or pay for transportation.

PapaDave

4 years ago

Reply to Lisa_Hooker

Yep. Its hard to give those things up. Which is why its difficult for those prices to stop going up when supply is limited. Very little demand destruction.

Consumers will have to cut back in other areas that are not essential.

Food and energy prices will face more upward pressure.

tedr01

4 years ago

Probably people buying a house now so they can lock in lower interest rates before rates rise much more. Makes the most sense.

ajc1970

4 years ago

Reply to tedr01

That’s my guess too — that and people have already locked in lower rates for X months while they shop, so they have to buy fast

If we see the same in June/July and then tanking sales in August, that’s likely what it was

Mish

4 years ago

Sorry for the delay, had internet issues today

Click each image to view details or purchase in the store.

Stay Informed

Subscribe to MishTalk

You will receive all messages from this feed and they will be delivered by email.

Don’t Miss a Post. Subscribe now.

New Home Sales Jump 10.7 Percent in Big Upward Surprise

Share this:

Recommended Articles

Decorate Your Walls with Mish Fine Art Images

Stay Informed

Subscribe to MishTalk