January 2019 Headline New Home Sales Declined

Written by John Lounsbury and Steven Hansen

The headlines say new home sales declined and continues in contraction. Median and average sales prices marginally declined - and the backlog of unsold homes declined.

Analyst Opinion of New Home Sales

This month the backward revisions were sometimes significantly upward. Because of weather and other factors, the rolling averages are the way to view this series. The rolling averages improved but remains in contraction.

This data series is suffering from methodology issues which manifest as significant backward revision. 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 decelerated by 10.7 % month-over-month.
  • unadjusted year-over-year sales were NEGATIVE 6.3 % year-over-year.
  • three-month unadjusted trend rate of growth accelerated 2,1 % month-over-month - is down 2.8 % year-over-year.

US Census Headlines:

  • seasonally adjusted sales up 6.9 % month-over-month
  • seasonally adjusted year-over-year sales down 4.1 %
  • market expected (from Econoday) seasonally adjusted annualized sales of 540 K to 638 K (consensus 620 K) versus the actual at 607 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 January 2019 were at a seasonally adjusted annual rate of 607,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.9 percent (±16.3 percent)* below the revised December rate of 652,000 and is 4.1 percent (±14.0 percent)* below the January 2018 estimate of 633,000.

Unadjusted New Home Sales Monthly Volumes In Thousands

The median sales price of new houses sold in January 2019 was $317,200. The average sales price was $373,100.

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