October’s new housing starts and existing home sales

The only widely watched reports released this week were the October report on New Residential Construction from the Census bureau, and the Existing Home Sales Report for October from the National Association of Realtors (NAR)….in addition to those, the Bureau of Labor Statistics released the Regional and State Employment and Unemployment for October, which breaks down the establishment survey and household survey data from the monthly jobs report released three weeks ago by region and by state…

This week also saw the release of two more regional Fed manufacturing surveys for November: the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported its broadest diffusion index of manufacturing conditions moved higher, from a reading of +5.6 in October to +10.4 in November, suggesting a modest pickup of that region’s manufacturing, while the Kansas City Fed manufacturing survey, covering western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico, reported its broadest composite index was at -3 in November, the same as in October and also not much changed from -2 in September, suggesting a continued minor slowdown of that region’s manufacturing…

Housing Starts Reported Higher in October; Building Permits at a 12 Year High

The October report on New Residential Construction(pdf) from the Census Bureau estimated that new housing units were being started at a seasonally adjusted annual rate of 1,314,000 units during the month, which was 3.8 percent (±8.7 percent)* above the revised September estimated annual rate of 1,266,000 housing unit starts, and was 8.5 percent (±10.8 percent)* above last October’s pace of 1,211,000 housing starts a year…the asterisks indicate that the Census does not have sufficient data to determine whether housing starts actually rose or fell from September or even from those in October a year ago, with the figures in parenthesis the most likely range of the change indicated; in other words, in other words, October’s housing starts could have been down by 4.9% or up by as much as 12.5% from those of September, with even larger revisions possible after a number of months…with this report, the annual rate for September housing starts was revised from the 1,256,000 reported last month to 1,266,000, and the annual rate for August housing starts, which was revised from 1,364,000 to a post recession record 1,386,000 last month, was revised down to a still record 1,375,000 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 canvassing Census field agents, which estimated that 113,100 housing units were started in October, down from the 113,400 units that were started in September…of those housing units started in October, an estimated 79,400 were single family homes and 32,200 were units in structures with more than 5 units, down from the revised 80,100 single family starts in September, and down from the 32,300 units started in structures with more than 5 units in September…

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 October, Census estimated new building permits were being issued at a seasonally adjusted annual rate of 1,461,000 housing units, which was 5.0 percent (±1.7 percent) above the September rate of 1,391,000 permits, and was 14.1 percent (±2.1 percent) above the rate of building permit issuance in October a year earlier, and was the highest since May 2007.…the annual rate for housing permits issued in September was revised a bit higher, from 1,387,000 to 1,391,000….again, these annualized estimates for new permits reported here were extrapolated from the unadjusted estimates provided monthly by canvassing census agents, which indicated that permits for 138,800 housing units were issued in October, up from the revised estimate of 114,900 new permits issued in September…the October permits included 79,600 permits for single family homes, up from 70,700 single family permits issued in September, and 48,000 permits for housing units in apartment buildings with 5 or more units, up from 41,200 such multifamily permits a month earlier…

For graphs and commentary on this report, see the following two posts by Bill McBride at Calculated Risk: Housing Starts increased to 1.314 Million Annual Rate in October and Comments on October Housing Starts

Existing Home Sales Rose 1.9% in October

The National Association of Realtors (NAR) reported that their seasonally adjusted count of existing home sales rose by 1.9% from September to October, projecting that 5.46 million existing homes would sell over an entire year if the October home sales pace were extrapolated over that year, a pace that was also 4.6% above the 5.22 million annual sales rate projected in October of a year ago…September sales, now indicated at a 5.36 million annual rate, were revised from the 5.38 million annual sales rate indicated by last month’s report….the NAR also reported that the median sales price for all existing-home types was $270,900 in October, 6.2% higher than in October a year earlier, which they say “marks 92 straight months of year-over-year gains“…..the NAR press release, which is titled “Existing-Home Sales Climb 1.9% in October“, 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 of the actual number of homes that sold each month…this unadjusted data indicates that roughly 463,000 homes sold in October, up by 2.9% from the 450,000 homes that sold in September, and up by 3.8% from the 446,000 homes that sold in October of last year, so we can see there was a relatively minor effect from the seasonal adjustment on this month’s annualized published figures…..that same pdf indicates that the median home selling price for all housing types fell 0.2%, from a revised $271,500 in September to $270,900 in October, while the average home sales price was $307,800, up a bit from the $307,500 average sales price in September, and up 4.7% from the $293,900 average home sales price of October a year ago…regionally, average home sales prices ranged from a low of $237,500 in the Midwest to a high of $423,100 in the West, with the East and the Midwest both showing a decrease in the average sales price for the month…for both seasonally adjusted and unadjusted graphs and additional commentary on this report, see the following two posts from Bill McBride at Calculated Risk: NAR: Existing-Home Sales Increased to 5.46 million in October and Comments on October 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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