New Home Sales Blast Higher Despite Floundering Jobs
As reported in the New Residential Sales report for June, sales of new single-family houses in June 2020 were at a seasonally adjusted annual rate of 776,000.
The Great Recession recovery high was in January of 2020 at 774,000.
Sales in June are 13.8 percent above the revised May rate of 682,000 and 6.9 percent above the June 2019 estimate of 726,000.
The median sales price of new houses sold in June 2020 was $329,200. The average sales price was $384,700.
Supply of New Houses
For Sale Inventory and Months’ Supply
The seasonally-adjusted estimate of new houses for sale at the end of June was 307,000. This represents a supply of 4.7 months at the current sales rate.
The red line in my first two charts, new homes for sale, is a measure of builder confidence.
New homes for sale peaked in January of 2019 at 637,000 units SAAR and has been trending lower ever since. It is now 307,000.
Builders are not as confident as in 2019 and that predates Covid. Builders seem reluctant to make the mistake they made in 2006-2008.
- Over 30 Million People About to Lose $600 in Unemployment Benefits
- Unemployment Claims Rise for the First Time in 4 Months
- More Than Half of Business Closures are Permanent
Even though home sales are doing well vs nearly everything else, the jobs picture is another matter.
The Fed has encouraged speculation in financial assets and succeeded, for now.