August new home construction and existing home sales

there were just two reports of note this week: the August report on New Residential Construction from the Census Bureau and the Existing Home Sales Report for August from the National Association of Realtors (NAR)…other reports released this week included Regional and State Employment and Unemployment for August from the BLS, and the Chicago Fed National Activity Index (CFNAI) for August, a weighted composite index of 85 different economic metrics, which fell to −0.55 in August, down from +0.24 in July, revised from the +0.24 reported last month….however, the 3 month average of the index still rose from –0.09 in July to –0.07 in August, which nonetheless indicates that national economic activity has been below the historical trend over those 3 recent months…in addition, this week also saw the Kansas City Fed manufacturing survey for September, covering western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico, which reported its broadest composite index rose to +6 in September, up from -4 in August and –6 in July, suggesting that the 18 month regional contraction, mostly in energy related industries, may be coming to an end…

New Housing Construction Little Changed in August; Building Permits Down YoY

the August report on New Residential Construction (pdf) from the Census Bureau estimated that the widely watched count of new housing units started during the month was at a seasonally adjusted annual rate of 1,142,000, which was 5.8 percent (±9.7%)* below the revised July estimated annual rate of 1,212,000 housing unit starts, but was 0.9 percent (±12.5%)* above last August’s pace of 1,132,000 housing starts a year…the asterisks indicate that the Census does not have sufficient data to determine whether housing starts actually rose or fell over the past month or even over the past year, with the figure in parenthesis the most likely range of the change indicated; in other words, August’s housing starts could have been up by 3.9% or down by as much as 15.5% from those of July, with even larger revisions possible after a number of months…in this report, the annual rate for July housing starts was revised from the 1,211,000 reported last month to 1,212,000, while June starts, which were first reported at a 1,189,000 annual rate, were revised up from last month’s initial revised figure of 1,186,000 annually to 1,195,000 annually with this report….

those annual rates of starts reported here were extrapolated from a survey of a small percentage of US building permit offices visited by Census field agents, which estimated that 100,700 housing units were started in August, down from the 114,200 units started in July…of those housing units started in August, an estimated 66,700 were single family homes and 32,700 were units in structures with more than 5 units, down from the revised 72,700 single family starts in July, and down from the 40,400 units started in structures with more than 5 units in July…

the monthly data on new building permits, with a smaller margin of error, are probably a better monthly indicator of new housing construction trends than the volatile and often revised housing starts data…in August, Census estimated new building permits were being issued at a seasonally adjusted annual rate of 1,139,000 housing units, which was 0.4 percent (±1.6%)* below the revised July rate of 1,144,000 permits, and was 2.3 percent (±1.5%) below the rate of building permit issuance in August a year earlier…the annual rate for housing permits issued in July was revised from 1,152,000 down to 1,144,000  annually….again, these annual estimates for new permits reported here were extrapolated from the unadjusted estimates collected by canvassing census agents, which showed permits for 107,000 housing units were issued in August, up from the revised estimate of 95,100 new permits issued in July…the August permits included 71,300 permits for single family homes, up from 61,000 in July, and 32,500 permits for housing units in apartment buildings with 5 or more units, down from 31,600 such multifamily permits a month earlier…

for more graphs and commentary on this report, see the following two posts by Bill McBride at Calculated Risk: Housing Starts decreased to 1.142 Million Annual Rate in August and Comments on July Housing Starts

August Existing Home Sales Little Changed from July or from August a Year Ago

the National Association of Realtors (NAR) reported that their seasonally adjusted count of existing home sales slipped by 0.9% from July to August, projecting that 5.33 million homes would sell over an entire year if the August home sales pace were extrapolated over that year, a pace that was still 0.8% above the annual sales rate projected in August of a year ago; July sales at a 5.58 million annual rate were revised from the 5.59 annual rate indicated by last month’s report…the NAR also reported that the median sales price for all existing-home types was $240,200 in August, down from $243,300 in July but 5.1% higher than in August a year earlier, which they report as “the 54th consecutive monthly year over year increase in home prices”…..the NAR press release, which is titled “Existing-Home Sales Soften Further in August“, is in easy to read plain English, so if you’re interested in the details on housing inventories, cash sales, distressed sales, first time home buyers, etc., you can easily find them in that press release…as sales of existing properties do not add to our national output, neither these home sales nor the prices for which these homes sell are included in GDP, except insofar as real estate, local government and banking services are rendered during the selling process…

since this report is entirely seasonally adjusted and at a not very informative annual rate, we like to look at the raw data overview (pdf), which gives us a close approximation to the actual number of homes that sold each month…this unadjusted data indicates that roughly 541,000 homes sold in August, up by 5.5% from the 513,000 homes that sold in July, and up by 6.7% from the 504,000 homes that sold in August of last year, so we can see that it was just a seasonal adjustment that caused the annualized published figures up to show a decrease…that same pdf indicates that the median home selling price for all housing types fell 1.3%, from a revised $243,300 in July to $240,200 in August, while the average home sales price was $282,100, down 1.0% from the $284,900 average in July, but up 4.0% from the $271,300 average home sales price of August a year ago, with the regional average home sales prices ranging from a low of $222,700 in the Midwest to a high of $373,100 in the West…

for both seasonally adjusted and unadjusted graphs and additional commentary on this report, check out the following two posts from Bill McBride at Calculated Risk: Existing Home Sales decreased in August to 5.33 million SAAR and A Few Comments on August Existing Home Sales


(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most from the aforementioned GGO posts, contact me…)               

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