Some headlines today (Monday, April 25) are about a March rebound in new home sales. This was listed as one of the strong data points of the day on CNBC. However, other reports of the latest data are much more sanguine. See for example the article in the Washington Post.
From the Econintersect point of view, March 2011 is just one more bad month of new home sales. This is the lowest number of March sales in history (since this series records began in 1963):
Sales of new single-family houses in March 2011 were at a seasonally adjusted annual rate of 300,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 11.1 percent (±21.7%)* above the revised February rate of 270,000, but is 21.9 percent (±10.3%) below the March 2010 estimate of 384,000.
The median sales price of new houses sold in March 2011 was $213,800; the average sales price was $246,800. The seasonally adjusted estimate of new houses for sale at the end of March was 183,000. This represents a supply of 7.3 months at the current sales rate.
Confused? Census says sales are up, yet this is the lowest March in history. Census uses a seasonal adjustment methodology which continues to give the wrong answer. The graph below using unadjusted data tells the real story.
Since the middle of 2010, there is a clear less bad trend line. Econintersect believes this year – the new home sales market will bottom when YoY comparisons will be against data which was not distorted by the first time home buyer’s incentives.
This goes hand-in-hand with the analysis of new home permits and construction completions – New Home Construction: Is the End of the Decline Near?
Economic Data Points to Growing Profitablity in Residential Builders by John Lounsbury and Steven Hansen
We Could be Near a Housing Bottom by John Lounsbury (Seeking Alpha)
Residential Construction Still Seeking a Bottom by Steven Hansen
CoreLogic: Home Prices Down 7 Straight Months by Steven Hansen
Looking Past the Case-Shiller: It’s all about Supply by Scott Sambucci
New Home Sales Continuing to Decline by Steven Hansen
The Great Debate©: Residential Construction is Dead – Or Is It? by William Wheaton and Gleb Nechayev
New Housing Permits Offer Strange Data by Steven Hansen
The Great Debate©: Will Housing be a Drag on the Economy in 2011? Part 1 by John Lounsbury
The Great Debate©: Will Housing be a Drag on the Economy in 2011? Part 2 by John Lounsbury