For a change, the Census Department revised new home sales up for last month. Sales in August are down 8.7 percent from those July revisions.

New home sales from census department, chart by Mish

Census Department Numbers

• New Home Sales Sales: Sales of new single‐family houses in August 2023 were at a seasonally adjusted annual rate of 675,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 8.7 percent (±15.6 percent) below the revised July rate of 739,000, but is 5.8 percent (±21.1 percent) above the August 2022 estimate of 638,000.
• Sales Price: The median sales price of new houses sold in August 2023 was $430,300. The average sales price was $514,000.
• For Sale Inventory and Months’ Supply: The seasonally‐adjusted estimate of new houses for sale at the end of August was 436,000. This represents a supply of 7.8 months at the current sales rate.

Confidence Levels

Note the confidence levels (±15.6 percent from last month) and even less confidence from a year ago (±21.1 percent).

The confidence levels do not even factor in cancellations. This make sinking markets look too optimistic and rising markets out of recessions too pessimistic. The whole process is suspect.

New Home Sales Since 1963

New home sales from census department, chart by Mish

New Homes For Sale By Stage of Construction

Homes For Sale Discussion

The Census Bureau reports 436,000 homes are “For Sale”. From that, the bureau measures “months’ supply”.

But of those 437,000 homes for sale, only 76,000 have been completed.

Builder to prospect: “See this vacant lot? We call this a home for sale.”

There is a record level of 106,000 empty lots the Census Department classifies as “For Sale”. Meanwhile, the backlog of homes under construction is sinking while the number of spec homes completed but not sold rises to 76,000.

Month’s Supply

Based on a fictitious number of homes for sale, we can calculate fictitious supply in months at the current rate of fictional sales, plus or minus 16 percent or so, and practically guaranteed to be heavily revised next month.

Existing-Home Sales Decline 17 of Last 19 Months – Yes, This is a Crash

Existing-home sales chart courtesy of Trading Economics.

Existing-home sales slipped again in August as rising mortgage rates make housing prices the least affordable ever. Despite denials in many corners, a crash is underway.

For discussion please see Existing-Home Sales Decline 17 of Last 19 Months – Yes, This is a Crash

It’s a transaction crash though, not a price crash. It’s hit homebuilders too as transactions are at a 1963 level. People cannot afford homes with the current average mortgage rate at 7.50 percent.

Meanwhile, President Biden says inflation is coming down and the economy is great.

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