New and Existing home sales for July

The only widely watched reports released this week were the July report on new home sales from the Census bureau and the Existing Home Sales Report for July from the National Association of Realtors (NAR)….this week saw the release of the Kansas City Fed manufacturing survey for August, which covers western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico; they reported their broadest composite index fell to -6 in August, down from readings of -1 in July and 0 in June, suggesting a mild contraction of that region’s manufacturing industries….in addition, this week also saw a preliminary annual benchmark revision of employment data from the Bureau of Labor Statistics, which estimated there were 501,000 fewer payroll jobs in March of 2019 than had previously been reported…however, this estimate will not be applied to the monthly employment reports until the annual revision is finalized with the January 2020 employment report on the first Friday of February 2020, when the national employment survey figures are benchmarked to state tax records…..

New Home Sales Reported Lower in July After June Sales Revised Much Higher

The Census report on New Residential Sales for July (pdf) estimated that new single family homes were selling at a seasonally adjusted pace of 635,000 new homes a year, which was 12.8 percent (±16.2 percent)* below the revised June rate of 728,000 new single family home sales a year, but 4.3 percent (±14.0 percent)* above the estimated annual rate that new homes were selling at in July of last year….the asterisks indicate that based on their small sampling, Census could not be certain whether July new home sales rose or fell from those of June or even from those in July a year ago, with the figures in parenthesis representing the 90% confidence range for reported data in this report, which has the largest margin of error and is subject to the largest revisions of any census construction series….hence, these initial new home sales reports are not very reliable and often see significant revisions…with this report; sales new single family homes in June were revised from the annual rate of 646,000 reported last month to a 728,000 a year rate, post recession high, while home sales in May, initially reported at an annual rate of 626,000 and revised down to a 604,000 a year rate last month, were revised down to a 602,000 annual rate with this report, and while April’s annualized home sales rate, initially reported at 673,000 and revised from a rate of 679,000 down to 658,000 last month, were also revised a bit lower, to a 656,000 rate with this release..

The annual rates of sales reported here are seasonally adjusted after extrapolation from the estimates of canvassing Census field reps, which showed that approximately 53,000 new single family homes sold in July, down from the 66,000 new homes that sold in June and the 58,000 that sold in May….the raw numbers from Census field agents further estimated that the median sales price of new houses sold in July was $312,800, up from the median sale price of $306,000 in June but down from the median price of $327,500 in July a year ago, while the average July new home sales price was $388,000, up from $354,500 average sales price in June, but down from the average sales price of $392,300 in July a year ago….a seasonally adjusted estimate of 337,000 new single family houses remained for sale at the end of July, which represents a 6.4 month supply at the July sales rate, up from the revised 5.0 month supply of unsold homes in June, which was originally reported as a 6.3 month supply….for more details and graphics on this report, see Bill McBride’s two posts, New Home Sales decreased to 635,000 Annual Rate in July, Sales in June revised up to New Cycle High and A few Comments on June New Home Sales

Existing Home Sales Rise 2.5% in July After June Sales Revised Higher

The National Association of Realtors (NAR) reported that their seasonally adjusted count of existing home sold rose 2.5% from June to July, projecting that 5.42 million homes would sell over an entire year if the July home sales pace were extrapolated over that year, a pace that was also 0.6% above the annual sales rate projected in July of a year ago….June home sales at a 5.29 million annual rate were revised from the 5.27 million annual rate indicated by last month’s report…the NAR also reported that the median sales price for all existing-home types was $280,800 in July, 4.3% higher than in July a year earlier, which they report as “the 89th straight month of year-over-year gains“…..the NAR press release, which is titled “Existing-Home Sales Climb 2.5% in July“, 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….since 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…

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 540,000 homes sold in July, up by 2.3% from the 528,000 homes that sold in June, and up 3.3% from the estimated 523,000 homes that sold in July of last year, so we can see there wasn’t much of a seasonal adjustment to bring the annualized published figures up to the level reported…that same pdf indicates that the median home selling price for all housing types fell 1.6%, from a revised record high of $285,300 in June to $280,800 in July, while the average home sales price was $317,100, down 1.3% from the $321,400 average selling price in June, but up 3.0% from the $307,600 average home sales price of July a year ago, with the regional average home sales prices ranging from a low of $253,300 in the Midwest to a high of $421,700 in the West…for additional commentary with long term graphs on this report, see “NAR: Existing-Home Sales Increased to 5.42 million in July” and “Comments on July Existing Home Sales” from Bill McBride at Calculated Risk…

 

(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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