March New Home Sales Fell 1.5% Month-Over-Month

This morning's release of the March New Home Sales from the Census Bureau came in at 511K, down 1.5% month-over-month. Revisions were made to the previous three months reflecting a net gain of 23K. The Investing.com forecast was for 520K.

Here is the opening from the report:

Sales of new single-family houses in March 2016 were at a seasonally adjusted annual rate of 511,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.5 percent (±15.0%)* below the revised February rate of 519,000, but is 5.4 percent (±16.0%)* above the March 2015 estimate of 485,000. [Full Report]

For a longer-term perspective, here is a snapshot of the data series, which is produced in conjunction with the Department of Housing and Urban Development. The data since January 1963 is available in the St. Louis Fed's FRED repository here. We've included a six-month moving average to highlight the trend in this highly volatile series.

Over this time frame we see the steady rise in new home sales following the 1990 recession and the acceleration in sales during the real estate bubble that peaked in 2005.

The Population-Adjusted Reality

Now let's examine the data with a simple population adjustment. The Census Bureau's mid-month population estimates show a 71.8% increase in the US population since 1963. Here is a chart of new home sales as a percent of the population.

New single-family home sales are about 13% below the 1963 start of this data series. The population-adjusted version is 49.6% below the first 1963 sales and at a level similar to the lows we saw during the double-dip recession in the early 1980s, a time when 30-year mortgage rates peaked above 18%. Today's 30-year rate is around 4%.