April’s new home construction and existing home sales

Just two widely watched reports were released this week: the April report on New Residential Construction from the Census Bureau and the Existing Home Sales Report for April from the National Association of Realtors…other than those, another regional Fed manufacturing survey for May was also released this week: the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported their broadest diffusion index of manufacturing conditions rose to -43.1 in May from -56.6 in April, the third negative reading in a row, indicating a slightly smaller majority of the region’s manufacturing firms reported a decrease in their activity this month than in April…in addition, the Bureau of Labor Statistics released the Regional and State Employment and Unemployment Summary for April this week, which breaks down the two employment surveys from the monthly national jobs report by state and region….while the text of this report provides a useful summary of this data, the real meat can be found in the tables linked at the end of the report, where one can find the civilian labor force data and the change in payrolls by industry for each of the 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands…

April Housing Starts and Building Permits Reported Much Lower

The April 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 891,000 in April, which was 30.2 percent (±11.0 percent) below the revised March estimated rate of 1,276,000 annually, and 29.7 percent (±8.1 percent) below last April’s rate of 1,267,000 housing starts a year….the figures shown in parenthesis indicate the most likely range of the change indicated; in other words, April housing starts could have been down by 19.2% or by as much as 41.2% from those of March, with revisions of a greater magnitude in either direction from that range possible…with this report, the annual rate for March housing starts was revised from the 1,216,000 reported last month to 1,276,000, while February starts, which were first reported at a 1,599,000 annual rate, were revised from last month’s initial revised figure of 1,564,000 annually to a 1,567,000 annual rate with this report….

The annual rates of housing 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 81,800 housing units were started in April, down from the 105,000 housing units that were started in March and the 111,600 housing units that were started in February…of those housing units started in April, an estimated 60,400 were single family homes and 20,100 were units in structures with more than 5 units, down from the revised 73,000 single family starts in March and down from the 31,100 units started in structures with more than 5 units in March…

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 April, Census estimated new building permits for housing units were being issued at a seasonally adjusted annual rate of 1,074,000, which was 20.8 percent (±0.9 percent) below the revised March rate of 1,356,000, and was 19.2 percent (±0.9 percent) below the rate of building permit issuance in April a year earlier…the annual rate for housing permits issued in March was revised from 1,353,000 to 1,356,000….again, these annual estimates for new permits reported here were extrapolated from the unadjusted estimates collected monthly by canvassing census agents, which showed permits for roughly 96,900 housing units were issued in April, down from the revised estimate of 115,900 new permits issued in March…. for graphs and commentary on this report, see the following two posts by Bill McBride at Calculated Risk: Housing Starts decreased to 891 Thousand Annual Rate in April  and Comments on April Housing Starts… 

Existing Home Sales Fell 17.8% in April, Now Down 17.2% Year over Year

The National Association of Realtors (NAR) reported that seasonally adjusted existing home sales fell by 17.8% from March to April, the largest month-over-month drop since July 2010, projecting that 4.33 million existing homes would sell over an entire year if the April home sales pace were extrapolated over that year, a pace that was also 17.2% below the annual sales rate projected in April of a year ago….the NAR also reported that the median sales price for all existing-home types was $286,800 in April, 7.4% higher than in April a year earlier, which they report “marks 98 straight months of year-over-year gains“…..the NAR press release, which is titled “Existing-Home Sales Wane 17.8% in April“, 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 read about 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 usually look at the raw data overview (pdf) to see what actually happened during the month…this unadjusted data indicates that roughly 373,000 homes sold in April, down 10.3% from the 416,000 homes that sold in March, and down by 18.2% from the 456,000 homes that sold in April of last year, so we can see the effect of the seasonal adjustment on the reported sales decrease, as it anticipates that home sales would increase as spring progresses…that same pdf indicates that the median home selling price for all housing types rose by 2.2%, from a revised $280,700 in March to $286,800 in April, while the average home sales price rose 1.7% to $321,500, from the $316,100 average sales price in March, while it was up 5.4% from the $305,000 average April home sales price of a year ago…to view both seasonally adjusted and unadjusted graphs and additional commentary on this report, again see the following two posts from Bill McBride at Calculated Risk: NAR: Existing-Home Sales Decreased to 4.33 million in April and Comments on April 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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