August 2017 Headline New Home Sales Again Decline

The headlines say new home sales declined and below market expectations. Our analysis continues to show a continuing deceleration of new home sales.

Analyst Opinion of New Home Sales

This month the backward revisions were mixed, but the rolling averages significantly declined. Because of weather and other factors, the rolling averages are the way to view this series - and the rolling averages are at the lower levels seen since the beginning of 2016..

Still this month was better than last month which was terrible.

This data series is suffering from methodology issues which manifest as significant backward revision - and this month the revisions were up. Home sales move in spurts and jumps - so this is why we view this series using a three month rolling average.

Econintersect analysis:

  • unadjusted sales growth accelerated 5.2 % month-over-month.
  • unadjusted year-over-year sales down 2.2 % year-over-year. Year-over-year growth rate this month was below the range of growth seen last 12 months.
  • three month unadjusted trend rate of growth decelerated 3.2 % month-over-month - is up 0.7 % year-over-year.

US Census Headlines:

  • seasonally adjusted sales down 3.4 % month-over-month
  • seasonally adjusted year-over-year sales down 1.2 %
  • market expected (from Bloomberg) seasonally adjusted annualized sales of 555 K to 620 K (consensus 583 K) versus the actual at 560 K.

The quantity of new single family homes for sale remains well below historical levels.

Seasonally Adjusted New Homes for Sale

The headlines of the data release:

Sales of new single-family houses in August 2017 were at a seasonally adjusted annual rate of 560,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 3.4 percent (±13.0 percent)* below the revised July rate of 580,000 and is 1.2 percent (±18.5 percent)* below the August 2016 estimate of 567,000.

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