New home sales revisions yesterday were exceptional. I created a new chart to show the changes. 
Last month I reported New Home Sales Jump 12.3 Percent Smash Expectations
That didn’t happen. Barring no further revisions (unlikely), sales did jump 8.6 percent. But from August unrevised the jump was actually 6.4 percent.
From the as initially reported July sales 736,000 sales are down to 679,000. That’s a 7.7 percent decline in three months.
With revisions out of the way, let’s ponder the latest Census Bureau fictional report on New Residential Construction.
New Residential Construction Report for October
- New Home Sales Sales of new single‐family houses in October 2023 were at a seasonally adjusted annual rate of 679,000.This is 5.6 percent (±12.3 percent) below the revised September rate of 719,000, but is 17.7 percent (±17.9 percent) above the October 2022 estimate of 577,000.
- Sales Price The median sales price of new houses sold in October 2023 was $409,300. The average sales price was $487,000.
- For Sale Inventory and Months’ Supply The seasonally‐adjusted estimate of new houses for sale at the end of October was 439,000. This represents a supply of 7.8 months at the current sales rate
Please note the huge margins of error on these reports, currently±12.3 percent month-over month and ±17.9 percent year-over-year.
New Home Sales Since 1963
New home sales are down 34 percent since August of 2020 and are back near levels hit in 1963. That’s pretty much a crash.
New Homes For Sale By Stage of Construction
Fictional Homes For Sale
- Of the allegedly 439,000 homes for sale only 76,000 are completed.
- 106,000 of the 439,000 homes for sale have not even broken ground.
Fictional Supply of Homes for Sale
Based on fictional sales and a fictional number of homes for sale, the Census Department calculates the fictional supply of new homes at 7.8 months.
Existing Home Sales Hit a New 13-Year Low
On November 21, I noted Existing Home Sales Sink 4.1 Percent, Down 19 of the Last 21 Months
Existing-home sales are down 40 percent since January of 2022.
Comparatively speaking, new home sales are doing great, down only 34 percent. Yet the price of existing homes keeps rising.
How the Fed Destroyed the Housing Market and Created Inflation in Pictures
For discussion of this dual-track housing bubble with rising prices despite a transaction crash, please see How the Fed Destroyed the Housing Market and Created Inflation in Pictures
Why do they bother reporting if there is a 100% margin of error
You’d be silly to sell a high-value hard asset like a house in a time of structural inflation. Houses are being treated like generational-wealth for very good reason.
Hop on the roller coaster, the ride up is wonderful, the ride down is a scream.
I’m not seeing a “huge collapse.” Mish, are you getting a case of the vapors? Do you have a fainting couch?
You don’t think they are misrepresenting the numbers on purpose do you?
guess the $10,000 credit to buy down interest rate isn’t working out
Wait a minute; from the chart titled “New Home Sales Since 1963” it looks like unit numbers are back to the pre-pandemic 2019 levels. Shouldn’t that be called “Normal” or sort of normal? Did the last year only/just wipe out the pandemic period 2020 crazy high with negative real interest rates? What were the interest rates in 2019 4% compared to the last 40 yr average of something like 6%, yes?
If volumes are off 34% but prices are up does this say that only the highest value homes are selling and driving the median price up?
I’m beginning to guess that we are nearing the bottom and will see a rate reduction for the spring buying season just in time for a pre-election economic recovery miracle. 🤔
Who the heck knows
You are correct, home sales are currently at a historically normal level.
Seems like whatever affect this crash in sales has on GDP has already happened and the residential construction industry is rebounding.
Residential Investment change in GDP:
2022-Q1 : -1.8%, Q2: -14.1%, Q3: -26.4%, Q4: -24.9%
2023-Q1 : -5.3%, Q2: -3.2%, Q3: +3.9%.
Two Words: Interest Rates
Three words
Over valued homes
Not really. Not if you consider long-term inflationary expectations.
2024 is gonna feel like 2008 without low interest rates.
Ooops, Didn’t view first CO
Divorce courts made marriage economic suicide for men. Fewer marriages mean less need for home ownership.
Marriage, even dating nowadays for a man is like dancing through a minefield in the Ukraine.
It doesn’t change anything. She gets the house and the man sleeps in his car so no extra housing needed.
Not if you dump the house before the you know what really hits the fan!
When divorce picked up in 2000, home were sold, and apartment occupancy surged
About 30 years ago an independent start-up all-sports talk radio station WSCR ‘The Score’ in Chicago had various strip clubs as its main sponsors for several years.
Long-term inflationary trends make home ownership a necessity.
It will be interesting to see at which level the housing market becomes liquid again. We are not there yet by a long shot. My bet is on big cities will fall the most because of drops in population and crime while small and medium cities hold up much better.
Amazon prime coupled with rural utility companies hanging high speed fiber on existing utility infrastructure is killing big cities. The 100 yr old industrial city model is a dead man walking.
The crime may hold up the liquidity though…
Ara we surprised that we cannot trust Government fabricated statistics . . .
Always happens when the Governments try to buy and maintain prosperity . . .
Great work Mish . . .
I think the recession is here. I went to Target and Best Buy yesterday here in a high traffic area of Los Angeles and both stores were mostly empty. Best Buy had stacks of TVs for sale and no one buying. Look out below!
All shipping has been online. Have you not seen the Black Friday record numbers??
I’m waiting to see what the final figures are in February from all the returns after Christmas.
I went to the post office today in Orlando. I was the only customer in the place. I thought it was closed when I pulled into the parking lot.
Bithlo is not Orlando
Commercial retail storefront recession is here, forever.
White people abandoned retail malls when blacks invented the knockout game.
Kenta Kinte polar bear hunting in the post modern, urban landscape. A return to hunter gathering where the produce and prey has changed, but, the aboriginal sense of tribalism remains.
Bring back the draft.
Reversion to the mean … and then some.
Housing will seem like it stays flat while everything else inflates up to it’s absurd level in 3-5 years.
Sounds like a great buying opportunity sooner or later…
Glad to see sales revised down, Mish, along with YoY price declines approaching 19%. Now, let’s get that recession on tab and see if we can double the decline. A 40% drop in new homes prices sounds just about right.
Your year on year median house price decline appears false. Weird ?
Per Wolf it’s actually 18%. My bad for going a bit too high. May seem weird by definitely not false, given the 1% difference. The problem, of course, is that existing home prices are only down about 5%.
Prices of New Houses Drop Further, -18% Year-over-Year, Sales Drop, High Inventories Rise Further, Supply Jumps | Wolf Street
Snd new home sales are only about 15% of total home sales in the US – +/- 700k vs 4.7 mil. total new nd existing homes sold
Not such a big impact overall
I’m with you there!
You wrote “price decline” not quantity of home sold.
Again, see my post just above. Clink on the link and it will take you to Wolf Richter’s very detailed post that clearly shows new home prices are down 18% YoY.
What part of that is hard to understand? One would expect a decrease in sales volume which Mish seems to be obsessed with would lead to falling prices, NO?
Do not know or care about your source. All other sources say prices are stable. See Mr. Sherlock’s post for today.. What is the purpose of your fabrications? Is that difficult to comprehend?
Only an anecdote, but maybe interesting. We live in a part of the Columbia River Gorge that’s about 65 miles to 120 miles east of Portland. There’s been a steady increase in the number of people moving out here. In the last 30 years, the population has grown by about 35%.
Just last week, I decided to start saving the local real estate circulars because I’ve been seeing so many houses whose listings are marked “improved price.” I’ve decided to join the local Rotary Club, which does classic small-town service projects.
Lots of the local movers and shakers are members, and I’ll get a better handle in the next 6 months or so. I think this is of interest because when people talk about “the exodus from the cities,” they’re talking about areas like ours.
House and land prices went way up after about 2015, and now they’re softening because of the interest rate situation. I’d also note that, in the Portland area, the city is losing population because of the rampant disorder, and office vacancies are roughly one-third.