Economists expected a rebound in housing this month so they are no doubt shocked by the Housing Residential Sales report.

New Home Sales

Sales of new single‐family houses in May 2019 were at a seasonally adjusted annual rate of 626,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.8 percent below the revised April rate of 679,000 and is 3.7 percent below the May 2018 estimate of 650,000.

Sales Price

The median sales price of new houses sold in May 2019 was $308,000. The average sales price was $377,200.

For Sale Inventory and Months’ Supply

The seasonally‐adjusted estimate of new houses for sale at the end of May was 333,000. This represents a supply of 6.4 months at the current sales rate.

Expectations

The Econoday consensus estimate was 680,000 units at a Seasonally-Adjusted-Annualized Rate (SAAR). 626,000 missed the mark by about 8%.

Econoday notes price data fell sharply, down 8.1 percent on the month to a median $308,000. Year-on-year, the median is down 2.7 percent and right in line with the 3.7 percent decline in sales.

Econoday's closing remark is worth noting: "For the Federal Reserve, the sudden downturn in May new home sales coincides with their concern over recent weakness in other parts of the economy, namely business investment, and adds further to the odds for a July rate cut."

New Homes by Region

RECOMMENDED ARTICLES

Image placeholder title

Volatility

This report shows intense regional volatility. There may be huge revisions in the West, or other regions lower.

Supply

Home builders sit on 333,000 new homes for sale. This represents builder speculation. But where is it?

333,000 is a national number. The report does not break down the supply by region. If the West has huge oversupply, those builders are in trouble.

Attitudes

New home sales are below where they were in 1965.

Affordability and attitude changes by milennials towards the "ownership society" and family formation are the key reasons sales have gone nowhere.

When the Fed bailed out the banks and mortgage holders, it did so at the expense of the ascendant generation who now cannot afford homes and luxuries their parent did.

For a discussion of attitudes and blame, please see Millennials, the Screwed Generation, Blame Boomers For Making Their Lives Worse.

Mike "Mish" Shedlock

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.

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 Top Estimates, Hit Four-Month High, Huge Surge in the West

New home sales rebounded strongly in March and revisions took February higher.

New Home Sales Decline 0.6%, Near Expectations, Prices Jump

New home prices are up, sales are soft but slowly rising over time. Sales are only 0.5% higher than a year ago.

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 Rise Following Huge Two-Month Downward Revisions

I apologize for the diversion from political slime into actual economic reporting. But let's discuss new home sales.

New Home Sales Beat Expectations, Up Most Since November 2017

New home sales are up thanks to builder discounts and falling mortgage rates.

New Home Sales Dive 8.9% in October, Down 12.0% From Year Ago

Upward revisions in Aug and Sep were not enough to offset a plunge in new home sales below any economist's forecast.

New Home Sales Plunge 10.4 Percent: In Search of Good News

New home sales in December plunged 10.4 percent in December to a seasonally adjusted annualized rate of 536,000.