This morning's release of the December New Home Sales from the Census Bureau came in at 694K, down 0.4% month-over-month from a revised 697K in November. This is its third consecutive monthly decline.

Here is the opening from the report:

New Home Sales
Sales of new single‐family houses in December 2019 were at a seasonally adjusted annual rate of 694,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.4 percent (±15.1 percent)* below the revised November rate of 697,000, but is 23.0 percent (±20.0 percent) above the December 2018 estimate of 564,000. An estimated 681,000 new homes were sold in 2019. This is 10.3 percent (±6.4 percent) above the 2018 figure of 617,000.

Sales Price
The median sales price of new houses sold in December 2019 was $331,400. The average sales price was $384,500. [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.

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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 75.6% increase in the US population since 1963. Here is a chart of new home sales as a percent of the population.

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New single-family home sales are 17.4% above the 1963 start of this data series. The population-adjusted version is 33.1% 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 at 18.63%. Today's 30-year rate is about 3.6%.

For another perspective, here is a chart of the median new home sale prices back to 1963, inflation-adjusted. The data source is also the Census Bureau and can be found on the press release and website above. For inflation adjustment, we use the CPI-U, which is the Consumer Price Index for All Urban Consumers. We've included a 6-month moving average for this extremely volatile metric to give us a clearer sense of the trend.

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Here's a zoomed-in look since 2000.

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