June 2021 Headline New Home Sales Confirms Significant Slowing

Written by John Lounsbury and Steven Hansen

The headlines say new home sales growth slowed month-over-month. New homes for sale rose to a 6.3 months supply at the current sales rate.

Analyst Opinion of New Home Sales

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

This month confirms a significant slowing in new homes - even though it is compared to the COVID spike in new home sales last year. It seems the homes for sale may be too expensive or are in the wrong locations.

Growth in 2021 to date still exceeds every year since 2008

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 25.6 % month-over-month.
  • unadjusted year-over-year sales were -24.1 % year-over-year.
  • the three-month unadjusted trend rate of growth decelerated 24.8 % month-over-month and is up 1.5 % year-over-year.

US Census Headlines:

  • seasonally adjusted sales down 6.6 % month-over-month
  • seasonally adjusted year-over-year sales down 19.4 %
  • the market expected (from Econoday) seasonally adjusted annualized sales of 763 K to 814 K (consensus 800 K) versus the actual at 676 K

The headlines of the data release:

Sales of new single‐family houses in June 2021 were at a seasonally adjusted annual rate of 676,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.6 percent (±16.5 percent)* below the revised May rate of 724,000 and is 19.4 percent (±13.9 percent) below the June 2020 estimate of 839,000.

Unadjusted New Home Sales Monthly Volumes In Thousands

The median sales price of new houses sold in June 2021 was $361,800. The average sales price was $428,700.

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