All elements are kicking in for housing right now with prices showing strength, permits moving up, and also sales on the climb. New home sales came in much stronger than expected, at a 621,000 annualized rate in March which was last exceeded by a 622,000 rate in July last year but is otherwise, by far, the best of the expansion.
The surge in sales did not come at the expense of pricing which, on the contrary, was very strong in March, up a monthly 7.5 percent to a median $315,100. The year-on-year rate, at only 1.2 percent vs 15.6 percent for sales, offers room for further price gains ahead. Supply did move into the market, up 3,000 to 268,000 units, though relative to sales remains thin at 5.2 months vs 5.4 months in February and January and 5.5 months in March last year.
The West is the standout region, up 16.7 percent in the month to a 175,000 rate and a 33 percent year-on-year gain. The South is by far the largest region for new homes, up 1.6 percent in the month to 323,000 and a 5.9 percent year-on-year gain. Also having a good month was the Northeast, up 26 percent in the month to 39,000.
Existing home sales (in data released last week) are also at expansion highs as are most prices (this morning’s FHFA and Case-Shiller reports). The new home sales market is a central feature of the housing sector and will set the pace for housing in general, one that increasingly points to a very strong 2017.
Mortgage News Daily reports New Home Sales Nearly Match Post-Crisis High.
Sales of newly constructed homes appear to have stopped, at least for the moment, their up-one-month, down-the-next pattern. They rose for the third consecutive month in March, and did so convincingly.
The Census Bureau and the Department of Housing and Urban Development say that sales of new homes jumped 5.8 percent in March, to a seasonally adjusted annual rate of 621,000 units. The rate nearly tied that of July 2016, 622,000 units, for the highest sales pace since the housing crisis. March also marked the first time since last July that sales have topped 600,000. March sales were up 15.6 percent compared to the previous March when the annual rate was 537,000.
On a non-adjusted basis, there were 58,000 new homes sold. This is 10,000 more sales than in February and 8,000 more than the previous March.
Median prices had declined slightly in February but resumed their upward trend in March. The median price was $315,100 compared to $311,400 a year earlier. The average price of a home sold was $388,200 compared to $367,700 in March 2016.
Sales in the Northeast were up 25.8 percent from February and 21.9 percent from the previous March. The Midwest had a month-over-month slip, down 4.5 percent but were up 23.5 percent on an annual basis. There was a 1.6 percent monthly increase and a 5.9 percent annual one in the South while the West saw gains of 16.7 percent and 32.6 percent respectively.
At the end of the reporting period, there were 266,000 (unadjusted) homes available for sale. This is an estimated 5.2-month supply. More than half of available homes, 148,000, were under construction. The median time on the market was 3.7 months.
The above chart puts new home sales in a light. Also, note there is no “acceleration” just a steady upward trend.
These reports add a few ticks to my GDP estimate for the first quarter. I will post an estimate later today along with the range of estimates in play.
Mike “Mish” Shedlock