January 2020 Headline New Home Sales Improved?

Written by John Lounsbury and Steven Hansen

The headlines say new home sales grew month-over-month - but the three-month rolling average growth declined.

Analyst Opinion of New Home Sales

This month the backward revisions were slight. Because of weather and other factors, the rolling averages are the way to view this series. The rolling averages declined.

Growth in 2019 still exceeds every year since 2007.

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

Econintersect analysis:

  • unadjusted sales growth decelerated by 10.0 % month-over-month.
  • unadjusted year-over-year sales were +16.3 % year-over-year.
  • the three-month unadjusted trend rate of growth decelerated by 4.1 % month-over-month - is up 18.3 % year-over-year.

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US Census Headlines:

  • seasonally adjusted sales up 7,9 % month-over-month
  • seasonally adjusted year-over-year sales up 18.6 %
  • the market expected (from Econoday) seasonally adjusted annualized sales of 695 K to 727 K (consensus 708 K) versus the actual at 764 K.

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

Seasonally Adjusted New Homes for Sale

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The headlines of the data release:

Sales of new single‐family houses in January 2020 were at a seasonally adjusted annual rate of 764,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.9 percent (±17.8 percent)* above the revised December rate of 708,000 and is 18.6 percent (±19.2 percent)* above the January 2019 estimate of 644,000.

Unadjusted New Home Sales Monthly Volumes In Thousands

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Comments

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Kurt Benson 1 year ago Member's comment

What's the latest?

Andrew Armstrong 1 year ago Member's comment

That last chart is very telling.