Here’s a take on the Commerce Department’s New Residential Sales Report released on Friday.
Sales of new one-family houses in August 2009 were at a seasonally adjusted annual rate of 429,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.7 percent (Â±16.2%) above the revised July rate of 426,000, but is 3.4 percent (Â±13.3%) below the August 2008 estimate of 444,000.
(gotta love the +/- percentages)
The LA Times provides some additional perspective:
August’s sales pace was 4.3% below the same month a year earlier. Last year ended with 485,000 new homes sold, the worst year for new-home sales since 1982 and the third-worst year since the federal government began tracking the data in 1963. New-home sales peaked in 2005 at 1.23 million units.
Builders also have scaled back construction dramatically, cutting the inventory of new homes to a 7.3-month supply, down 34% from 11.1 months a year earlier. The reduction marks a return to a more normal market: a roughly six-month supply is the historical norm.
As does MarketWatch:
Despite a record drop in prices, sales of new homes flattened out in August after four months of strong increases, the Commerce Department estimated Friday. Sales of new homes rose a statistically insignificant 0.7% in August to a seasonally adjusted annual rate of 429,000 from a downwardly revised 426,000 in July, which was previously reported as 433,000. Sales were down 3.4% from a year earlier, but were up 30% from the low in January. Through the first eight months of 2009, sales were down 28% compared with the same period a year ago.
Bottom line is that new construction is competing with rising foreclosures and faces significant challenges with financing availability. New home sales data doesn’t include contract rescissions either so I have always felt it is very inconsistent (a lot more positive) than national home builders actual numbers.