New Home Sales Crush Forecasts in Surge to 14-Year High

New home sales rose for the 6th month to a seasonally-adjusted annualized rate (SAAR) of 1,011,000 homes.

Econoday Consensus

The Econoday consensus was 875,000 units in a range of 820,000 to 950,000 units.

The Census Bureau's New Residential Sales report provides a regional breakdown. 

Sales by Region SAAR

• Northeast: 42,000
• Midwest: 99,000
• South: 636,000
• West: 242,000

New Home Sales 1963-Present

Seasonal Adjustments Distortions

It's important to understand seasonal adjustment distortions. New home sales for the month were 83,000 units, the same as last month. 

Sales in the normally busy months of April and May instead happened in July and August making for mammoth adjustments.

The impact especially shows up year over year where sales were up an amazing 43.2 percent from last August.

Actual Number of New Homes Sold in August

• Northeast: 4,000
• Midwest: 9,000
• South: 52,000
• West: 19,000
• Total: 83,000

83,000 in actual sales is reported as 1,011,000 new homes sold.

Year-to-Date Comparisons

Year-to-date actual sales were at this level in the mid-1980s and were higher in the late 1970s. 

Sales were also higher between 1996 and 2006. Population-adjusted, these sales don't really stack up. 

New home sales are having a very good year. However, the above chart puts a badly needed perspective on things.

Existing Home Sales at Highest Level in 14 Years

Also, note Existing Home Sales at Highest Level in 14 Years. But once again, seasonal distortions annualized are in play.