by Mish

That was far lower than even the lowest Econoday economist’s estimate of 590,000.

The Econoday consensus was 610,000 in a range of 590,000 to 622,000. Nonetheless, Econoday was happy about a number of things.

Overstating weakness, July’s headline for new home sales fell to a far lower-than-expected annualized rate of 571,000. This is offset, however, by upward revisions totaling 33,000 in the two prior months which now stand at 630,000 and 618,000. This series, where sample sizes are low, is often volatile month-to-month with the 3-month average, still over 600,000 and just off expansion highs, telling the more reliable story.
The best news in July’s report is an increase in supply, up 4,000 to 276,000 new homes on the market. Relative to sales, supply moves from 5.2 months to 5.8 months which is nearly at the 6 month mark which is widely considered to be balanced for new homes.
Prices are showing increasing traction, up 0.7 percent in the month to a median $313,700. This is up 6.3 percent year-on-year which is roughly in line with prices of existing homes.
The strength in pricing is good news for residential investment but not for first-time buyers who are being priced out of the new home market. The downdraft in July’s data aside, new homes are probably still a positive for the housing sector which has been trending higher in fits and starts all year. Watch tomorrow for existing home sales where strength is the expectation.

Worst Annual Pace in 3 Years For New Home Sales

Mortgage News Daily had a different take in its report, Worst Annual Pace in 3 Years For New Home Sales.

New home sales in July were expected to remain steady after scoring a slight gain in June, instead they plunged to a rate even lower than those a year earlier. Three of the four geographic regions shared in the decline,
Sales of newly constructed homes in July are estimated at a seasonally adjusted annual rate of 571,000 units. This is down 9.4 percent from June and 8.9 percent from the estimate for July 2016. The bad news was mitigated a bit as the U.S. Census Bureau and the Department of Housing and Urban Development revised their earlier June estimate to 630,000 units from their original estimate of 610,000.

On a historic basis and especially on a population-adjusted basis, new home sales are pathetic. They would have been pathetic even if the Econoday consensus estimate was reached.

New Home Sales Percent Change From Year Ago

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Year-over-year, new home sales are down almost 9 percent. Since 2012, such declines have been taken back. The result is the slow uptrend red line in the first chart.

As always, Econoday cheered “price traction”. The Econoday Keynesian parrot is always happy when people get less for their money.

It’s far beyond the parrot’s comprehension, but one of the reasons new home sales are pathetic because few can afford them.

Moreover, the attitudes of millennials towards homes, material things, and family formation have changed. Attitude shifts have not hit bottom yet, and may not for another generation or longer.

Mike “Mish” Shedlock

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.

New Home Sales Near Post Crisis High

New homes sales rose at a seasonally-adjusted annualized rate(SAAR) of 621,000 in March vs. an Econoday expectation of 588,000.

New Home Sales Contract 11.4%: Sales Barely Up Year-Over-Year

Housing momentum took an 11.4% dive in April to 565,000 seasonally adjusted annualized (SAAR) units.

New Home Sales a Bit Short of Expectations, May Revised Lower

New home sales came in at a seasonally adjusted annualized rate of 610,000 units, just short of the Econoday consensus of 611,000.

Existing Home Sales Best Since February 2007: Good as it Gets?

Existing home sales beat expectations with a climb to 5.71 million units, seasonally adjusted annualized (SAAR).

New Home Sales Sink 1.7% to 627,000 Units: Builder Spec Homes Most Since 2009

New home sales in July were 627,000 units SAAR. Economists expected a rebound in new home sales to 649,000 from 631,000.

Existing Home Sales Top Consensus

Existing home sales came in at 5.34M, seasonally adjusted annualize, topping the consensus estimate of 5.28M.

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 Rise First Time Since May: Hurricane Impacts Abate, NAR Begs for Subsidies

Existing home sales rose 0.7 percent, the first increase since May. The NAR reported 5.39 million sales at a seasonally adjusted annualized rate (SAAR) topping the Econoday consensus estimate of 5.30 million sales.