August’s new home construction and existing home sales

there were just two reports with large followings released 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)…in addition, the Bureau of Labor Statistics released the August Import-Export Price Index, which showed that average prices for both imports and for exports rose 0.6% in August, figures which will be used by the BEA to adjust next week’s preliminary international trade data for inflation…this week also saw the release the Philadelphia Fed Manufacturing Survey for September, covering most of Pennsylvania, southern New Jersey, and Delaware, which reported its broadest diffusion index of manufacturing conditions rose from +18.9 in August to +23.8 in September, suggesting continuing strong growth in that region’s manufacturing…

New Housing Construction Little Changed in August; Building Permits Rising

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 1,180,000, which was 0.8 percent (±9.6%)* below the revised July estimated annual rate of 1,190,000 housing unit starts, but was 1.4 percent (±8.9 percent)* above last August’s pace of 1,164,000 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 8.8% or down by as much as 10.4% 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 1,155,000 reported last month  to 1,190,000, while June starts, which were first reported at a 1,215,000 annual rate, were revised up from last month’s initial revised figure of 1,213,000 annually to 1,217,000 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 103,300 housing units were started in August, down from the 112,900 units started in July…of those housing units started in August, an estimated 76,100 were single family homes and 26,700 were units in structures with more than 5 units, down from the revised 79,200 single family starts in July, and down from the 38,200 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 1,300,000 housing units, which was 5.7 percent (±2.0 percent) above the revised July rate of 1,230,000 permits, and was 8.3 percent (±1.6 percent) above the rate of building permit issuance in August a year earlier…the annual rate for housing permits issued in July was revised from 1,223,000 up to 1,230,000  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 122,600 housing units were issued in August, up from the revised estimate of 101,000 new permits issued in July…the August permits included 76,500 permits for single family homes, up from 69,100 in July, and 42,500 permits for housing units in apartment buildings with 5 or more units, up from 28,700 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 1.180 Million Annual Rate in August and Comments on August Housing Starts

August Existing Home Sales Down 1.7 from July

the National Association of Realtors (NAR) reported that their seasonally adjusted count of existing home sales fell by 1.7% from July to August, the 4th decrease in five months, projecting that 5.35 million homes would sell over an entire year if the August home sales pace were extrapolated over that year, a pace that was just 0.2% above the annual sales rate projected in August of a year ago….July sales at a 5.44 million annual rate were essentially unrevised…the NAR also reported that the median sales price for all existing-home types was $253,500 in August, 5.6% higher than in August a year earlier, which they report as “the 66th straight month of year-over-year gains”…..the NAR press release, which is titled “Existing-Home Sales Subside 1.7 Percent 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 535,000 homes sold in August, up by 4.3% from the 513,000 homes that sold in July, but down by 0.7% from the 539,000 homes that sold in August of last year, so we can see that it was 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 1.8%, from a revised $258,100 in July to $253,500 in August, while the average home sales price was $294,600, down 1.4% from the $298,800 average in July, but up 4.5% from the $282,000 average home sales price of August a year ago, with the regional average home sales prices ranging from a low of $231,700 in the Midwest to a high of $394,700 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: NAR: “Existing-Home Sales Subside 1.7 Percent in August “ 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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