New home sales data from commerce department, chart by Mish

The Commerce Department's New Residential Sales report for May is a big upward surprise. 

New Home Sales Sales 

• Sales of new single‐family houses in May 2022 were at a seasonally adjusted annual rate of 696,000, 
• This is 10.7 percent above the revised April rate of 629,000 but is 5.9 percent below the May 2021 estimate of 740,000. 

Sales Price 

The median sales price of new houses sold in May 2022 was $449,000. The average sales price was $511,400. 

For Sale Inventory and Months’ Supply 

• The seasonally‐adjusted estimate of new houses for sale at the end of May was 444,000. 
• This represents a supply of 7.7 months at the current sales rate.  

Supply 

New home sales data from commerce department, chart by Mish

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

New Homes for Sale by Stage of Construction

New home sales data from commerce department, chart by Mish

Of the purported 444,000 homes for sale, only 37,000 are actually built. Another 294,000 have at least started. 

115,000 new homes for sale have not broken ground yet. 

Does This Change Anything?

Although this was a big surprise, even to me, a quick look at the lead chart shows this surge does not change the picture. 

All the rest of the data on existing home sales, retail sales, manufacturing PMI, has been dismal. 

Here's a couple of new Tweet to consider.

Channels telling us that used truck prices are screaming back towards earth, down 25-30% this qtr.

But this is no where near the bottom. Prices could fall by 50%+ by year end.

— Craig Fuller 🛩🚛🇺🇦 (@FreightAlley) June 24, 2022

The drop in FedEx Ground (LTL) is not surprising - we’ve been hearing that the LTL operators, even the highest quality ones, have started to see a slowdown in recent weeks. LTL has more exposure to industrial and tends to be LIFO of a downturn (smaller shipment sizes).

— Craig Fuller 🛩🚛🇺🇦 (@FreightAlley) June 24, 2022

In terms of activity, existing home sales dwarf new home sales in activity. On June 21, I noted Existing Home Sales Skid Another 3.4 Percent in May, Down Fourth Month

• Existing-home sales fell for the fourth straight month to a seasonally adjusted annual rate of 5.41 million.
• Sales are down 16.8 percent since January.

Yesterday, I noted US Manufacturing Output Contracts For First time Since 2020, Service Growth Dramatically Slows

Trucking signals a major contraction. 

A single data point on new home sales does not change anything. I've Seen Enough, the US is in Recession Now, Q&A on Why