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New Home Sales Crash 15 Percent From Original May Report, 8.1 Percent as Revised

Huge declines coupled with big negative revisions in new home sales is the key story for today
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New Home Sales data from Census Department, chart by Mish

New Home Sales data from Census Department, chart by Mish

 May Residential Construction Report

On June 24, I reported New Home Sales Jump 10.7 Percent in May in Big Upward Surprise

The Census Bureau originally reported May sales at a seasonally adjusted annual rate of 696,000. Today, the Census Bureau took that back and then some for June.

June Residential Construction Report

Please consider Details of the June New Residential Construction Report

New Home Sales

  • New Home Sales Sales of new single‐family houses in June 2022 were at a seasonally adjusted annual rate of 590,000.
  • This is 8.1 percent below the revised May rate of 642,000 and is 17.4 percent below the June 2021 estimate of 714,000. 

Sales Price 

  • The median sales price of new houses sold in June 2022 was $402,400.
  • The average sales price was $456,800. 

For Sale Inventory and Months’ Supply 

  • The seasonally‐adjusted estimate of new houses for sale at the end of June was 457,000. 
  • This represents a supply of 9.3 months at the current sales rate. 

Seasonally Adjusted Revisions

  • March as reported 715,000. March as revised 707,000
  • April as reported 629,000. April as revised 604,000
  • May as reported 696,000. May as revised 642,000
  • Total negative revisions March-May, 87,000

Compared to the original May report of 696,000, sales are down 15.2 percent, 8.1 percent as revised. The census department also revised March and April lower.

Supply of New Homes

New Home Sales data from Census Department, chart by Mish

New Home Sales data from Census Department, chart by Mish

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

Nonetheless, supply of 9.3 months is the highest since May of 2010, also at 9.3 months.

New Homes for Sale by Stage of Construction

New Home Sales data from Census Department, chart by Mish

New Home Sales data from Census Department, chart by Mish

Of the purported 457,000 homes for sale, only 41,000 are actually built. Another 306,000 have at least started.

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110,000 new homes for sale have not broken ground yet. 

The 306,000 started homes is significant, only exceeded in housing bubble years. 

Lumber Futures 

Lumber Futures courtesy of Trading Economics 

Lumber Futures courtesy of Trading Economics 

Sellers Drop Prices

Redfin reports Over 25 Percent of Home Sellers Dropped Their Price in June In Most Metro Areas

Builders who started homes on spec earlier this year are going to get killed on lumber prices.

Existing Home Sales Dive Another 5.4 Percent in June, Down Fifth Month

On July 20, I noted Existing Home Sales Dive Another 5.4 Percent in June, Down Fifth Month

I was very puzzled by the new home sales strength in June. But, hey, it didn't happen.

Hello Recession Doubters

Please note A Flood of Repossessed Cars Poised to Hit the Used Car Market

On July 24 I commented A Big Housing Bust is the Key to Understanding This Recession

Hello Janet Yellen, President Biden, and all the recession doubters on Twitter. This is what happens in recessions. 

And it's just started. 

Not to worry, The White House Brags: The Average "Peson" Spends $35 Less on Gasoline

This post originated at MishTalk.Com

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