New Home Sales plunged. And the Census Department completely revised away last month’s fictional 8.8 percent rise.
New Residential Construction
The Census Department released a second consecutive heavily revised New Residential Construction report.
- New Home Sales: Sales of new single‐family houses in April 2024 were at a seasonally adjusted annual rate of 634,000.
- This is 4.7 percent (±12.0 percent) below the revised March rate of 665,000 and is 7.7 percent (±13.2 percent) below the April 2023 estimate of 687,000.
- Sales Price: The median sales price of new houses sold in April 2024 was $433,500. The average sales price was $505,700.
- For Sale Inventory and Months’ Supply: The seasonally‐adjusted estimate of new houses for sale at the end of April was 480,000. This represents a supply of 9.1 months at the current sales rate.
Note the margins of error in this report, 12 percent and higher.
Last month, the Census Department reported sales at 693,000. This month the Census Department says oops, March sales were really only 665,000.
Compared to the March number as initially reported, sales are down 8.5 percent.
Bloomberg analysts forecast 675,000 new home sales. They overshot the mark by 6.1 percent.
Second Big Revision
Here’s my headline from last month: New Home Sales Rise 8.8 Percent After 3.8 Percent Negative Revision
These numbers may be revised again next month in any direction, but typically lower.
New Home Sales Since 1963
To put sales into perspective, they are about where they were in 1963.
Who can afford them? Prices are at record levels and mortgage rates are 7.17 percent according to Mortgage News Daily.
New Homes For Sale By Stage of Construction
Allegedly, there are 480,00 homes for sale but 101,000 of them have not been started.
281,000 homes have been started and 98,000 are complete.
There are 379,000 homes started or completed. That is the most since May of 2008. Good luck with that at these mortgage rates, currently 7.17 percent.
I will do a follow-up post on this idea shortly.
New Homes for Sale Supply
From a fictitious number of new homes for sale of which 101,000 have not even been started, and a questionable and likely to be revised number of sales, the Census Bureau calculates a fictitious supply of 9.1 months.
Existing-Home Sales
Existing-home sales fell 1.9 percent in April and are also down 1.9 percent from a year ago. Sales have not gone anywhere for 17 months.
For discussion, please see Existing-Home Sales Decline 1.9 Percent, Sales Mostly Stagnant for 17 Months
Existing home sales have fallen to 4.14 million, about where they were in November of 1978.
Housing Starts vs Completions Looks Ominous for the Economy
Housing completions have surpassed housing starts. History suggests bad things follow. But what’s happening this time?
On May 16, I commented Housing Starts vs Completions Looks Ominous for the Economy
And I still wonder where we are going to house millions of illegal aliens and at what price.
AI magic running on NVDA chips will solve everything. Mr. Market is never wrong.
SPY made a rd trip to Mar (C).
This economy is so good that housekeepers are making $150,000. Maybe take a trip to Palm Beach?
link to cnbc.com
she is showered with love like the dog of the house.
China’s cauldron around Taiwan’s neck is tightening. They operate like Hamas before
Oct 7 attack last year.
China has Taiwan in a pot?
The only thing keeping them form a friendly reunion is the US and Brit deep state.
Someone can start renting out all the brand new tents used for the pro Palestinian rallies. Whatever happened with that novelty protest? Poof, gone like a fart in the wind.
They can find any river or sea with a compass.
4.1 million annual home sales represents a 34 year turnover rate. Forever houses?
Of course. Rising prices and falling volumes. That is stagflation. If you want to make money for a while, you have to invest for stagflation, so for now, real estate is still a good spot.
Today, the equity market is realizing stagflation is the answer, so it is shaking a little.
Remember, Stagflation >> NVDA.
NVDA is less than 15 miles from Lebanon.
Would be better off in Lebanon, Indiana.
Has the Fed gone too far already? Housing sucks, CRE is in the toilet and company after company – AAPL TGT MCD SBUX LOW HD Red Lobster – is telling us that the consumer is cracking. Yet employment is still strong? How?
We are not doing the Fed any favors if employment data is being manipulated.
“Yet employment is still strong? How?”
It’s the boomers. Millions are retiring each year so that acts as a natural unseen wave of “layoffs” and no one here talks about it much except me. You don’t need to take my word for it, go over to the social security snapshot published every month.
Last month was nearly 200k new recipients which means most or all likely quit working, who replaced them after they retired?
Those retirements will continue for the next 7 to 10 years and there aren’t enough young people being born to replace them. The oldest millenials are now pushing 40, in ten years they will be in their 50’s, more retirements coming.
The boomers are going to live forever. Just ask them.
Correct i am 🙂
Epic fail by Dr Fraudci
Still with the Fauchi Ouchie. Isn’t he retired and/or dead?
Let it go. The bad man can’t hurt your feelings anymore.
The youngest cohort in population terms (Gen Z) is the size of the boomer cohort. So there is a 1-1 replacement.
link to statista.com
What there won’t be is a huge ratio of workers to retirees like there used to be.
1:1 replacement isn’t enough, that will just keep things level. if it stays that way there won’t be any economic growth and if you have any population hiccup to the downside then you have mayhem.
As PapaDave likes to remind us, energy demand will continue to grow so who will run the refineries, solar plants, wind farms, etc? And that’s just energy then you have plumbers, electricians, carpenters, pilots, nurses, doctors, etc. What then happens is people will move to where the demand and pay is highest like the $150k housekeeper I referenced above.
See the problem?
Who says you need population growth to have economic growth?
You can definitely have economic growth without population growth if you have productivity increase.
It’s literally impossible to have continuous population growth. At some point far sooner than you imagine (at a world wide population growth of just 2% in 35 years we’d have 14 billion people, in 70 years 28 billion people).
Growth is going to have to happen from something other than increased population (like productivity).
Employment is strong because millions have been injured or killed by the Covid Vaccines….
Each week more drop — creating loads of job openings.
Ed Dowd has detailed all of this
Of course cnbc bloomberg etc will not raise this toxic issue… so they instead claim the job market is awesome
I suppose it is .. if you didn’t inject… loads of opportunities…
Financial Analyst Ed Dowd says – Disability Claims Among Women Shot Up 55% After Rollout of COVID Vaccines.
link to expose-news.com
Employment is strong because 40% of all new jobs filled are GOVERNMENT “jobs” over the last 2 years.
The fraud, waste and abuse is unprecedented
That too.
For sale, completed (green) was sold-out in 2022 (31), but reached 98, which is above the 2001/2002 recession level. Started + completed (aqua) reached 379 above 2001/2002 recession area. The trend is up. Landlords still raise rent in order to get the same cap rates.
Buying a house in the US has made people “sitting ducks” to malicious local admins who will just raise taxes, impose weird punitive regulations etc.
I remember a time (lasted for 4-5 generations) in Greece where your primary residence had no property taxes, regulations were minimal, inheritance taxes were avoided by transferring the property early on. Result was: much more pretty neighborhoods (especially flowers etc), and no homeless people anywhere.
“Result was: much more pretty neighborhoods (especially flowers etc), and no homeless people anywhere.”
And a country substantially less competitive, advanced, wealthy and free than even North Korea. Where the sadsacks unfortunate enough to be born there, have little choice but to live up to the bent over stereotype they’re saddled with… Sure ain’t Plato’s Greece no mo’…
And all of that, as a direct result of “someone else”; shorthand for any Greek with the competence to do anything useful and productive at all; being forced to pay for the upkeep of and securing of the connected deadweight leeches’ “pretty” flower beds.
Not that there’s anything wrong with no taxes on “property.” Just as long as noone else is forced to pay any taxes; on anything at all aside from property; either. It is taxes on anything other than property which is; always, everywhere and for all time; the problem.
The new homes sales rate should be normalized for population or number of households.
The normalized new home sales rate is about half of what it was in 1963.
east coast central nj- houses FLYING off the shelf in 7-14 days in 300k to 1.5 mill range and on the top 4-8 mill range- there are bidding wars for crappy knockdowns on high and low end BUT the “middle” which around here is 1.5 to 3 is a different story… that might take 45 days and get a slight discount to ask bout 5%
note the 2 million houses were 750 to 1.3 b4 covid the 5-8 mill were 3 mill
its a clown show
recent sale 8 mill 14 days u/c closed in 30 had +5 offers all over ask -house is coming down will be +2.5 mill build
10.5 million to move in 2 years from now…
Sounds like hype: anyone doing bidding wars ever for a residential property anywhere is a sucker — but especially today and especially in an armpit like NJ.
Nothing like having a bunch of starving realtors tell you the result of a bidding war you weren’t allowed to observe.
Prices will round trip back to below 2019 levels. Will take some patience but like every cycle, it always violently swings back the other direction
It’s also possible that things just move sideways for several years until inflation and wages catch up. A ‘lost decade’ in home prices would probably do the same thing as a 25% slide in price.
A 100% to 400% price increase bubble is not cyclically righted with a tiny 25% drop. That’s just wishful thinking. And its the realtor hopey wishy fantasy. ALL of the ill gotten paper gains will be erased before the pendulum is finished
400%. I don’t think homes are 400% in a price bubble. Median home price in the US is 420K. If homes were 400% in a bubble it would mean average price should be like 100K which was last seen in like 1985 which is 40 years ago.
link to fred.stlouisfed.org
Look at the chart here.
If you look at the 2007 bubble high, prices were 257. At 3% inflation from 2007 you get 1.03^17 1.65. 257×1.65 = 424 which is right in line with what we have now.
If you consider 2009 when prices were at their lowest post crash you get 208. 1.03^14=1.51. 208×1.51=314. That says homes are over valued by 314/420 = 25%.
Neither of those is close to 100% much less 400%
Ive been watching about 8 markets across the US since 2019 for personal interest and planning.
I’ve watched 400k homes get listed and sold for 800k in markets
I’ve watched 300k homes get listed and sold for 1.2M
I’ve watched 800k homes get listed and sold for over 4M
I’ve watched 1M homes get listed and sold for 4.5M
So my 100% to 400% is absolutely true. I’m not talking about averages or medians. I talking real life transactions
Same in Florida. High end is moving briskly, lower end is sitting for a while.
I suspect that’s because at the higher end it’s not new buyers so they already have money coming from the sale of their existing home.
Same sort of thing here, all cash buyers appear out of the ground like the skeletons in Jason and the Argonauts. It’s not Blackrock or Blackstone either. Someone has money, or can or has sold their previous house for enough to buy the new one.
Ha Ha! It’s true. Who knows where they come from, but there they are, when a house if for sale.
I’m one, but I’m staying buried for a while yet.
I’ve lately continued to see “downward corrections” to prior months’ reporting. How do these frequent, negative corrections compare to the level of, and direction of, corrections in years prior to the Biden Administration’s publication of such data? Is this normal? Or is there perhaps some intentionally optimistic reporting going on?
Normal at economic turns. Expect more
“And I still wonder where we are going to house millions of illegal aliens and at what price.”
I wouldn’t worry too much, this country received millions of illegals starting from 1492 and things have been chugging along just fine. In the beginning all immigrants cram 8 to 10 to a small house then they spread out over time. It won’t be different this time.
5,000 illegals per day crammed 10 per residence equals 500 new homes or apartments every single day. Where is that supply going to come from? And frankly, we’d be lucky if it’s only 5,000 per day. December 2023 average more like 10k invaders every day.
Don’t compare the legal European immigrants of yesterday to these modern leaches. In the past, immigrants were heavily vetted so they didn’t become a burden on society.
Lol legal immigration? Who gave the Mayflower kids permission to land and settle?
And there are plenty of empty homes, they are just not all in the same spot.
link to forbes.com
I guess it’s a good thing Greg Abbot and Desantis are spreading them out ALL over the country, they are doing half the work already.
Nobody in Burr Ridge Illinois has cut their own grass in years.
“5,000 illegals per day crammed 10 per residence equals 500 new homes or apartments every single day. Where is that supply going to come from?”
5000 reasonably well selected-for-ablebodiedness 20 somethings: Each and every one of them has at least 20 houses worth of lifetime labor in them. Possibly 50….. That’s a lot of houses.
The very notion that able bodied 20 somethings somehow aren’t able slap together something so trivial as some walls, a floor, a roof, some doors and windows and a bit of plumbing and wiring; with 21st century construction technology available, is so insanely economically illiterate it’s hard to even know where to begin.
Virtually every single one of those guys; given the capital now available to workers are, trivially, able to produce way, way, way more than what is required to simply house and feed them.
At least unless braindead, artificial restrictions are placed on them; it’s not 20 somethings out to make a better life for themselves, who will somehow fail to produce more value than they consume; and hence land on the productive side of the productive/leech divide; over the coming 50 years. OTOH: As for various “native” demographics: That’s a whole lot less of a sure thing.
Illegals don’t come with enough cash to buy houses.
Who needs cash when you have endless government programs for first time buyers?
Pick a program.
link to usa.gov
Or rent.
Yesterday in the comments you mentioned that you own more than propety here in the US. Maybe you could lend them one of your properties? You could even charge them rent. Heck the government might even have a program that pays thier rent for them. Guaranteed extra scratch for investing. Just a suggestion.
At least some people around here get it. Instead of endless whining I wish people here would learn to be entrepreneurs. I like money and the more people that are moving around the more money I can earn. When I see an immigrant I see endless $$$$$$$ opportunities.
Everyone’s politics, bigotry, racism, etc just gets in the way of profits. Of course politicians know this too so they put on a good circus show then keep the doors wide open for profits. People need to learn to play the game or be left behind.
Great, rent one of your houses to 10 illegals and see how trashed it will be in a year.
They will be packed like sardines, in filthy and dangerous slums. This time around they might rise against the gov and the elite and terrorize them. They know how. They are cancer cells growing in size. That’s Biden’s inheritance to Trump.
Vote for Bill The Butcher
That went very badly for the original inhabitants. They should have killed every white man they saw.
By your logic the illegal invaders should just kill all of those citizens who are here now.
Every one of your comments in this section is worse than any 14 year old kid could contribute.
Are you retarded or just full of shit?
Then why are you reading them? I suggest you petition Mish to bring back the ignore button and use it. I will do the same with your endless inane comments.
By all means you are also free to respond logically and intellectually rather than resorting to 10 year old name calling.
Boo to the ignore button… it shields everyone from the consequence of free speech.
It will be different this time, most of the illegals are unskilled and just here for the handouts. It is not the same when my grandparents immigrated legally from Sweden and Italy, they came to this country with little more than the clothes on their backs and received nothing from the taxpayers, they worked hard and achieved prosperity.
Ah the old, “my ancestors were better than yours play.” So if they literally came with nothing then how did they get by? you can’t create food and shelter out of thin air and food & shelter cost money since the beginning of time.
And the government was handing out plenty of free stuff like land that belonged to other people as long as they were willing to kill natives.
Time for you to take a history lesson.
link to loc.gov
Although immigrants often settled near ports of entry, a large number did find their way inland. Many states, especially those with sparse populations, actively sought to attract immigrants by offering jobs or land for farming. Many immigrants wanted to move to communities established by previous settlers from their homelands.
…Social tensions were also part of the immigrant experience. Often stereotyped and discriminated against, many immigrants suffered verbal and physical abuse because they were “different.”
“Ah the old, “my ancestors were better than yours play.””
My dad can beat up your dad. Staple of children, of all ages, since about forever.
Difference; Pre systemic, junta funded universal indoctrination, being: Children used to eventually grow up.
Thems were the good, ol’e days…