Home builders finally ran out of incentives or consumers finally got fed up with what they are getting for their money. Here’s the result in pictures.
Let’s review the November Census Bureau report on New Residential Construction.
- New Home Sales Sales of new single-family houses in November 2023 were at a seasonally adjusted annual rate of 590,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.2 percent (±15.6 percent) below the revised October rate of 672,000, but is 1.4 percent (±19.8 percent) above the November 2022 estimate of 582,000.
- Sales Price The median sales price of new houses sold in November 2023 was $434,700. The average sales price was $488,900.
- For Sale Inventory and Months’ Supply The seasonally‐adjusted estimate of new houses for sale at the end of November was 451,000. This represents a supply of 9.2 months at the current sales rate.
New Home Sales Since 1963
Interesting New Home Sale Facts
- Down 12.2% since last month
- Down 27.2% since January 2022
- Down 47.2% since August 2020
- Down 57.5% from the record high in July of 2005
- Up 118.5% from the February 2011 record low
- Down 11.3 percent from July of 1963
New Homes For Sale By Stage of Construction
Fictional Homes For Sale
- Of the allegedly 451,000 homes for sale only 78,000 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 9.2 months. This is a seldom exceeded fictional number.
Housing Starts Jump 14.8 in November
Housing starts jumped 14.8 percent in November led by single family construction, up 18 percent. Revisions were negative.
In contrast to new home sales Housing Starts Jump 14.8 Percent but Permits Sink 2.5 Percent
This makes today’s new home sales report more interesting.
Existing Home Sales
In November, Existing Home Sales Rose 0.8 Percent, Only the Third Increase in 22 Months
The National Association of Realtors chief economist, Lawrence Yun, eyes a “marked turn“.
I am more than a bit skeptical of major turn because prices and mortgage rates are still too high. However, we are likely in a bottoming process IF the economy holds up.
See the above link for discussion of my thoughts vs Yun.
From Wolfe and Dagher article, Dec 22, Wall Street Journal:
Percentage of population owning their home, by country:
China — 89%
India — 87%
Indonesia — 84%
Brazil — 72%
USA — 64%
The USA has so much wealth, people can’t even afford to own their home. Fail.
I am buying three new vacation homes in Florida, Colorado and Wisconsin … but I haven’t really started buying yet.
I propose the 2006 housing bubble never finished deflating. Wave A ended in 2011. Wave B ended in 2021. Wave C is now well under way. Look for a bottom at levels below Wave A lows of 270. Target time by end of 2025.
We’re at a bottoming out when home prices are higher than they’ve ever been? Wtf
SALES very well could be bottoming out
That was very obvious
Obvious to someone who studies this for a living, perhaps, but not obvious to me.
Get word to Abbotts dispatchers to redirect the buses.
City Of New Orleans train back to Chicago Union Station – All Aboard!
This bullet stood out for me:
In 1963 the U.S. population was 184 million. Today it’s 340 million, almost double. There has been NO commensurate increase in the new homes baseline over 60 yeas. Shelter is a necessity, and household size has been shrinking over this period of doubling population. No wonder we have a huge affordable housing problem in this country. No wonder more and more people are saying “no” to more immigration–where are they to be housed? What has happened to macro-economic policy in this country?
In 1963 single-earner wages and household formations were high. Since then, we focused on a strong dollar, free trade, and fighting inflation (consumer goods and services). Financialization of the U.S. economy, drop in wages, two-earner households and asset inflation (homes, cars, stocks, bonds) have been the result.
The last 60 years have clearly benefitted the rentier (lender) class at the expense of the renter-borrower class (everyone else). What’s so surprising is that the more numerous “everyone else” has put up with this for so long.
I doubt that the fight against inflation has ended. Inflation trends don’t change except after long lags. I wouldn’t be surprised if interest rates stay high much longer and the home sales sector (and revisions) goes down further in the next 3-6 months. A drop in new home sales by another 10-15% is recession territory, looking at the chart over the past 50 years.
The playbook is for another recession, followed by a new wave of loose monetary policy and asset inflation. New homes and cars will then become even more unaffordable.
Does the Fed or the leadership class have any vision for ending this politically divisive and unsustainable cycle? No wonder so many are thinking of voting for the wrecking ball–Trump–in 2024.
Maybe collapse is what brings reform. Trump can initiate the former but lacks the brains and discipline to bring about the latter. Sad!
They Increased in the northeast and the West
Home price like stock prices need to double just to keep pace with inflation.
There are essentially no “new homes” in Mass. so that market is irrelevant here. Instead housing is added by refurbishing and gentrification. Still a ridiculous seller’s market with bidding wars. Prices in my town up 16% YOY.
Connecticut even hotter. The only thing that makes sense as to why are all the immigrants who have arrived in the last 10 years. CT would have lost population if it wasn’t for the immigrants.
The entire Northeast with the exception of some parts of NY and PA. is still going gangbusters. So is Wisconsin of all places. Still firmly in Housing Bubble 2.0 in many areas of the country and watch out when interest rates go below 5%.
I think Housing Bubble 2.0 is still alive and well in Colorado Springs as well.
I keep hearing about this exodus from the northeast or especially from NY, NJ and PA and the other states just keeping population rising by importing armies of immigrants mostly from 3rd world countries
Where are they getting the money to buy a $600, – 800k home especially if they are working a $20 hr job in retail for example
multi-generational households, plus many immigrants are actually skilled and make decent money
Cities like Lynn ahd and Everett MA which seemed at a standstill for decades are going gangbusters, home prices are now $600,000 in those places whereas household income is around $60,000.
Margin of error is +/- 90,000 homes.
Hope prices drop soon…
New home prices are down 14% already.
Good news! Hopefully prices follow suit and tank.
Prices will be based on supply and demand.
Housing prices are based on hype, greed and growth restrictions. Few markets are priced based on supply and demand – perhaps the black market for arms could be an example of a supply & demand market model.