New Home Sales Dive 18.2%
The Census Department’s New Residential Construction Report for February 2021 shows a steep, and unexpected dive in new home sales
Seasonally Adjusted Annualized Sales By Region
- US: 775,000 Down 18.2%
- Northeast: 38,000 Down 11.6%
- Midwest: 85,000 Down 37.5%
- South: 458,000 Down 14.7%
- West: 232,000 Down 16.4%
Not Adjusted Sales By Region
- US: 64,000
- Northeast: 3,000
- Midwest: 7,000
- South: 37,000
- West: 17,000
The seasonally-adjusted annualized sales numbers give bloated look at what’s really happening.
Economic Consensus
The Econoday economic consensus was 875,000 SAAR in a range of 825,000 to an amazingly overoptimistic 970,000 units.
Even the lowest estimate was lofty.
Some analysts blame the weather. It will take another month or two to see if rising interest rates and affordability are the real problems.
Mish
I agree with Zardoz above. When you force people to become unemployed by shutting down businesses and making the economy dependent on stimulus, entitlement programs, and welfare, it is easy to see that there will likely be more renters in affordable (not upper class) rentals, and fewer home buyers. I think that the United States is becoming a renter nation, and that there will be fewer and fewer home buying in the future. Additionally, with the upcoming crash that I anticipate, because there is an inflated bubble from so much money printing, I anticipate lots of people losing their equity in homes. I personally would not purchase a home at all and would rather own an apartment complex and allow people to rent from me, though that is my two cents.
Johnny Wakeman – https://www.peachtreeguttercleaning.com
Gold was hit today…..but as of yet has not reversed the recent (upward) trend change. I’m still long the fun trade.
The dollar was a beast today. I would expect tomorrow to be better, but if tomorrow gold breaks support at 1716, I might step out and lick my wounds until I have a better feeling about where we’re headed.
I think if we don’t hold the 1685 level in the short term, gold could go MUCH lower.Nothing says we even retest that level, but I would not be terribly surprised if we do, given the strength of the dollar and the Powell Put.
I’d pick weather over interest rates too. Historically rates are still incredibly low. If anything a small rise should accelerate purchases. I’d avoid measuring any rate rise on a percentage level. The base is too low. Instead I’d focus on the basis point rise
“Mew home sales”, cute 🙂
Mews is a British name for a row or courtyard of stables and carriage houses with living quarters above them, built behind large city houses before motor …
Losing 10 million jobs had to make a dent somewhere.
When you own an asset that is rapidly increasing in value then you hesitate to sell. When the potential buyers stop bidding then we will see lots of supply.
got lumber? link to qz.com
Closed sales down 8% here in February, but I think it can be attributed to low inventory and weather, since most of us were trapped at home shivering for a week or more in February. Inventory is still dropping, and the supply is down to 0.4 months.
Not just millennials and gen z’er’s moving here. A house in my zip code sold for around 40 million, making it the most expensive sale ever in the city, It was a very nice house, on Lake Austin, formerly owned by some Texas oilman. But 40 million worth of nice?
Probably bought by the top youtube cat video influencer.
You mean Joe Rogan? He bought a house closer to mine, a bit further out of town than the $40 million house….This one.
Only $14.4 Million or so. He’s very conservative with his money for a social media influencer.
The $40 mil house’s buyer has not been disclosed, AFAIK.
It was a joke that fell flat. Talking is a very rewarding profession these days and much better than inventing something useful.
I take daily walks in my neighbourhood and went to a street three hundred yards away I haven’t seen a five months and was surprised to find that several very expensive relatively new houses had been demolished, their lots consolidated and and in their place a few of what I can only describe as palaces being built. I would say that we are in a sweet spot when it comes to real estate as well as the quality of living.
“But 40 million worth of nice?”
About 720 kg of Gold, a lot of money.
I know you’ve seen this site before but you prompted me to have another look.
That’s happening here too, especially in the nicer close-in neighborhoods.
They might do that with my house, I think, when the time comes. It’s a million dollar house sitting on a ten million house LOT, in this new world. It’s only 28 years old, but it needs a couple of hundred K in remodel….I probably will sell it as is and give back a little money, when the time comes.
Fifty-fifty they bulldoze it.
I’m firmly convinced it is because of a lack of inventory. Household formation has been put off for nearly a decade and households are now unable to continue holding off.
For example: At my property I normally have a wait list of 50 or so people.
I now have a wait list of over 150 people. This has happened over the last year, indicating that something about COVID has changed perception of household formation. This isn’t homeownership, so interest rates have nothing to do with it. It’s about household formation in Eastern NC.
We are also a hotspot of migration from NYC and NJ here so that affects some too.