September 2018 Headline New Home Sales Significantly Slows

The headlines say new home sales fell off a cliff. Median sales prices were little changed - but the backlog of unsold homes grew with over 7 months of supply.

Analyst Opinion of New Home Sales

This month the backward revisions were significantly downward. Because of weather and other factors, the rolling averages are the way to view this series. The rolling averages also significantly fell helped by the downward revision of the last two months of data.

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 20.2 % month-over-month.
  • unadjusted year-over-year sales was NEGATIVE 18.0 % year-over-year. Year-over-year growth rate this month was the lowest growth since 2011.
  • three-month unadjusted trend rate of growth decelerated 6.2 % month-over-month - is down 2.8 % year-over-year.

US Census Headlines:

  • seasonally adjusted sales down 5.5 % month-over-month
  • seasonally adjusted year-over-year sales down 13.2 %
  • market expected (from Econoday) seasonally adjusted annualized sales of 610 K to 640 K (consensus 625 K) versus the actual at 553 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 September 2018 were at a seasonally adjusted annual rate of 553,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 5.5 percent (±12.1 percent)* below the revised August rate of 585,000 and is 13.2 percent (±13.6 percent)* below the September 2017 estimate of 637,000.

Unadjusted New Home Sales Monthly Volumes In Thousands

The median sales price of new houses sold in September 2018 was $320,000. The average sales price was $377,200.

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