New Home Sales Defy Expectations and Retreat in October

Mortgage News Daily comments New Home Sales Defy Expectations and Retreat in October.

New home sales were expected to make a strong showing in October; the consensus of analysts polled by Econoday was for a sharp increase from the September level of 553,000 to 575,000 units. Instead, there was a steep decline, amplified by a major upward revision to the September estimate.

The U.S. Census Bureau and the Department of Housing and Urban Development estimate that October sales of newly constructed homes were at a seasonally adjusted annual rate of 544,000 units, falling well below the lowest of analysts' projections. The result was a decline of 8.9 percent from the restated September rate, an upward revision to 597,000 units.

The September revision gave new home sales their first uptick since May. With that single exception sales have declined steadily from the 653,000 estimate for that month and the October number lags the 618,000 sales pace in October 2017 by 12 percent.

By Region

  • Northeast: Down 18.5 percent for the month and 46.3 percent compared to a year ago.
  • Midwest: Down 22.1 percent for the month and 16.7 percent compared to a year ago.
  • South: Down 7.7 percent for the month and 11.6 percent compared to a year ago.
  • West Down 3.2 percent for the month and 1.3 percent compared to a year ago

Peak

New home sales peaked at 712,000 units in November of 2017 on a hurricane rebuilding surge.

Sales have trended lower for most of 2018. The year-over-year numbers next month will be grim

Supply

At the end of the reporting period there were an estimated 336,000 homes for sale, an increase of 17.5 percent in the inventory year-over-year. This is an estimated 7.4-month supply at the current rate, almost a month more than was estimated for the September inventory. Only 74,000 of the available homes were ready for occupancy.

Oops. It appears builders were more than a bit too optimistic in building homes that no one wants or can afford.

Mike "Mish" Shedlock

New Home Sales Surge, Prices Down, Revisions Negative

New home sales beat economists expectations. But the surge was entirely in the South.

New Home Sales Down 7.8%: Six Reasons Sales Can't Break Out

The consensus estimate on new home sales missed the mark badly but there were positive revisions in two prior months.

Existing Home Sales Jump 2% Yet Remain Below Level Reached a Year Ago

Existing home sales rose 2% in October yet remain 0.9% below the level reached in October 2016.

New Home Sales Unexpectedly Dive Again (Don’t Blame Hurricanes)

The Census Bureau reports New home sales are down again, with median prices weakening sharply. Net sales revisions for June and July were negative. In addition, year-over-year sales are negative.

New Home Sales Plunge to Lowest Annualized Pace in Three Years

New home sales plunged to a seasonally-adjusted annualized rate (SAAR) of 571,000.

New Home Sales Surge Most in 28 Years on Percentage Basis

New home sales for September blew out top end expectations and then some, rising 18.9 percent, the largest percentage gain in 28 years.

Existing Home Sales Down Again: Yun Blames Inventory, a Symptom of the Problem

Economists expected a bounce in existing home sales in May. There was no bounce and revisions in April were negative.

New Home Sales Decline 6.9%, But From Upwardly Revised Numbers

New home sales fell 6.9% in April to a 673,000 (SAAR). Upward revisions added 39,000 sales to the prior two months.

June New Home Sales Decline 5.3 Percent from Huge Revision Lower in May

Economists missed the mark badly on new home sales estimates. And over half of last month's surge was revised away.