New Home Sales data from Census Department, chart by Mish

Housing Crash Synopsis

• May: On June 24, I reported New Home Sales Jump 10.7 Percent in May in Big Upward Surprise
• June: On July 26, I commented New Home Sales Crash 15 Percent From Original May Report, 8.1 Percent as Revised
• May Revised: The Census Bureau originally reported May sales at a seasonally adjusted annual rate of 696,000. As of July, May has been revised to 630,000 (9.5 percent lower, and one heck of a set of revisions).
• July: New Residential Construction Report.

July New Home Sales 

• Sales of new single‐family houses in July 2022 were at a seasonally adjusted annual rate of 511,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. 
• New home sales are 12.6 percent below the revised June rate of 585,000
• New home sales 29.6 percent below the July 2021 estimate of 726,000.

Sales Price

• The median sales price of new houses sold in July 2022 was $439,400. 
•  The average sales price was $546,800

For Sale Inventory and Months’ Supply

• The seasonally‐adjusted estimate of new houses for sale at the end of July was 464,000. 
• This represents a supply of 10.9 months at the current sales rate.

Seasonally Adjusted Revisions

• March as reported 715,000. March as revised 707,000
• April as reported 629,000. April as revised 619,000
• May as reported 696,000. May as revised 630,000
• June as reported 590,00. June as revised 585,000

Today the commerce department revised May lower a second time. With that, the big upward surprise boom in May simply vanished. 

Supply of New Homes

New Home Sales data from Census Department, chart by Mish

The supply figures are very distorted. The Census Department counts as "supply" homes not even under construction yet.

Nonetheless, supply of 10.9 months is the highest since March of 2009, at 11.0 months.

New Homes for Sale by Stage of Construction

Of the purported 464,000 homes for sale, only 45,000 are actually built. Another 312,000 have at least started.

107,000 new homes for sale have not broken ground yet.

The 312,000 started homes is significant, only exceeded in housing bubble years.

Lumber Futures

Lumber futures courtesy of Trading Economics

Lumber futures dropped from over 1,400 to 526 since March. 

Builders who started homes on spec earlier this year are going to get killed on lumber prices.

Existing-Home Sales Crash

• On August 18, I noted Existing-Home Sales Fall 5.9 Percent, Down Sixth Consecutive Month
• On July 20, I noted Existing Home Sales Dive Another 5.4 Percent in June, Down Fifth Month

Housing Starts Crash

• On August 16, I noted Housing Starts Drop 9.6 Percent, Now Below Pre-Pandemic Level, Led By Single Family
• On July 19, I commented Single-Family Housing Starts and Permits Dive Eight Percent in June

With new home sales down 12.6 percent in July, expect miserable housing starts in April. 

Hello Recession Doubters

New home sales are down a whopping 38.5 percent since January!

When have we seen housing data this week when the economy was not in recession?

Hello Janet Yellen, President Biden, and all the recession doubters on Twitter. This is what happens in recessions.

For further discussion, please see my July 24 post A Big Housing Bust is the Key to Understanding This Recession

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