August’s new home construction and existing home sales

The only widely watched monthly reports that were released this week were 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 Regional and State Employment and Unemployment for August, which breaks down the two surveys of the monthly employment report by state and region…and the week also saw the release of the first two regional Fed manufacturing surveys for September: the Empire State Manufacturing Survey from the New York Fed, which covers New York, northern New Jersey and Puerto Rico, reported their headline general business conditions index fell from +25.6 in August to +19.0 in September, still suggesting a broad based expansion of First District manufacturing, while the Philadelphia Fed Manufacturing Survey for September, covering most of Pennsylvania, southern New Jersey, and Delaware, reported their broadest diffusion index of manufacturing conditions rose from +11.9 in August to +22.9 in September, suggesting a return to strong growth rate for that region’s manufacturing… 

New Housing Construction Reported Higher in August; New Building Permits Fall

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 1,282,000, which was 9.2 percent (±11.4 percent)* above the revised July estimated annual rate of 1,174,000 housing unit starts, and 9.4 percent (±9.4 percent) above last August’s pace of 1,164,000 housing starts a year…the asterisk indicates that the Census does not have sufficient data to determine whether housing starts actually rose or fell over the past month, with the figure in parenthesis the most likely range of the change indicated; in other words, August’s housing starts could have been down by 3.2% or up by as much as 20.6% from those of July, with a 10% chance that the actual change could be outside of that wide range…in this report, the annual rate for July housing starts was revised from the 1,168,000 reported last month  to 1,174,000, while June starts, which were first reported at a 1,173000 annual rate, were revised up from last month’s initial revised figure of 1,158,000 annually to 1,177,000 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 113,400 housing units were started in August, up 2.3% from the 110,900 units started in July…of those housing units started in August, an estimated 79,100 were single family homes and 33,100 were units in structures with more than 5 units, down from the revised 81,700 single family starts in July, but up from the 28,600 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 for a seasonally adjusted annual rate of 1,229,000 housing units, which was 5.7 percent (±1.6 percent) below the revised July rate of 1,303,000 permits, and was 5.5 percent (±1.6 percent) below the rate of building permit issuance in August a year earlier…the annual rate for housing permits issued in July was revised from 1,311,000 to 1,303,000  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 roughly 114,800 housing units were issued in August, up from the revised estimate of 113,000 new permits issued in July…the August permits included 77,800 permits for single family homes, unchanged from July, and 33,200 permits for housing units in apartment buildings with 5 or more units, up from 22,800 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 Increased to 1.282 Million Annual Rate in August and Comments on August Housing Starts

August Existing Home Sales Unchanged from July

The National Association of Realtors (NAR) reported that their seasonally adjusted count of existing home sales was statistically unchanged in August, after four consecutive monthly sales decreases, projecting that 5.34 million homes would sell over an entire year if the August home sales pace were extrapolated over that year, a pace that was 1.5% below the 5.42 annual sales rate they projected in August of a year ago….July sales, also at a 5.34 million annual rate, were essentially unrevised…the NAR also reported that the median sales price for all existing-home types was $264,800 in August, 4.6% higher than in August a year earlier, which they report as “the 78th straight month of year-over-year gains”…..the NAR press release, which is titled “Existing-Home Sales Remain Flat Nationally, Mixed Results Regionally“, 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 539,000 homes sold in August, up by 3.1% from the 523,000 homes that sold in July, and up by 0.7% from the 535,000 homes that sold in August of last year, so we can see that it was the 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 1.7%, from a revised $269,300 in July to $264,800 in August, while the average home sales price was $303,200, down 1.4% from the $307,600 average in July, but up 3.0% from the $294,400 average home sales price of August a year ago, with the regional average home sales prices ranging from a low of $238,000 in the Midwest to a high of $410,100 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: NAR: Existing-Home Sales Unchanged at 5.34 million 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 picked from the aforementioned GGO posts, contact me…)      

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