Written by rjs, MarketWatch 666
New residential construction and existing home sales reports for July
The only widely watched reports released this week were the July report on New Residential Construction from the Census Bureau and the Existing Home Sales Report for July from the National Association of Realtors (NAR).
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This week also saw the first two regional Fed manufacturing surveys for August: the Empire State Manufacturing Survey from the New York Fed, which covers New York and northern New Jersey, reported their headline general business conditions index fell from +17.2 in July to +3.7 in August, suggesting a slowdown in the growth of First District manufacturing after the early summer rebound, while the Philadelphia Fed Manufacturing Survey for August, covering most of Pennsylvania, southern New Jersey, and Delaware, reported their broadest diffusion index of manufacturing conditions fell from +24.1 in July to +17.2 in August, still suggesting ongoing growth of that region’s manufacturing industries, as any positive index reading would.
In addition, this week also saw a preliminary annual benchmark revision of employment data from the Bureau of Labor Statistics, which estimated there were 173,000 fewer payroll jobs in March of 2020 than had previously been reported, which would then impact subsequent employment data…however, this estimate will not be applied to the monthly employment reports until the annual revision is finalized with the January 2021 employment report on the first Friday of February 2021, when the national employment survey figures are benchmarked to state tax records.
See also:
- August 2020 Empire State Manufacturing Index Significantly Declined
- August 2020 Philly Fed Manufacturing Survey Index Declined
- 15 August 2020 Initial Unemployment Claims Climb Back Over One Million
- June 2020 Leading Economic Index Somewhat Improves – Growth Will Likely Weaken In Final Months of 2020
- 15 August 2020 New York Fed Weekly Economic Index (WEI): Index Declined But Remains On A Recovery Trend
- July 2020 Sea Container Counts Improve And Are Suggesting An Improving Economy
- 29 July 2020 FOMC Meeting Minutes: Economic Outlook Continues To Be Dependent On the Course Of the Pandemic
New Housing Starts, Building Permits Reported Much Higher in July
The July report on New Residential Construction (pdf) from the Census Bureau estimated that the widely watched count of new housing units started in July was at a seasonally adjusted annual rate of 1,496,000, which was 22.6 percent (±14.7 percent) above the revised June estimated annual rate of 1,220,000 housing units started, and was 23.4 percent (±12.4 percent) above last July’s pace of 1,212,000 housing starts annually….the figures in parenthesis indicate the most likely range of the change indicated; in other words, July’s housing starts could have been up by 7.9% or by as much as 37.3% from those of June, with even larger revisions eventually possible…in this report, the annual rate for June housing starts was revised up from the 1,186,000 reported last month to 1,222,000, while May starts, which were first reported at a 974,000 unit annual rate, were revised from last month’s initial revised figure of 1,011,000 annually to an annual rate of 1,038,000 with this report….
Those annual rates of housing starts reported here were extrapolated from a survey of a small percentage of US building permit offices visited by Census field agents, from which they estimated that 139,400 housing units were started in July, up from the 114,600 units started in June and the 95,100 started in May…of those housing units started in July, an estimated 89,300 were single family homes and 49,400 were units in structures with more than 5 units, up from the revised 84,900 single family starts in June, and up from the 25,900 units started in structures with more than 5 units in June…
As we’ve noted previously, 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 July, Census estimated new building permits were being issued for a seasonally adjusted rate of 1,495,000 housing units per year, which was 18.8 percent (±1.1 percent) above the revised June annual rate of 1,258,000 permits, and was 9.4 percent (±1.5 percent) above the rate of building permit issuance in July a year earlier…the annual rate for housing permits issued in June was revised from 1,241,000 to 1,258,000….
Again, these annualized estimates for new permits reported here were extrapolated from the unadjusted estimates collected by canvassing census agents, which showed permits for 136.400 housing units were issued in July, up from the revised estimate of 124,000 new permits issued in June…the July permits included 92,700 permits for single family homes, up from 84,300 single family permits in June, and 39,600 permits for housing units in apartment buildings with 5 or more units, up from 35,800 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 1.496 Million Annual Rate in July and Comments on July Housing Starts.
See also:
Existing Home Sales Rose a Record 24.7% in July, Median Sales Price at Record $304,100
The National Association of Realtors (NAR) reported that their seasonally adjusted annual rate of existing homes sold rose by a record 24.7% from June to July, projecting that 5.86 million homes would sell over an entire year if the July home sales pace were extrapolated over that year, a pace that was also 8.7% above the annual sales rate projected in July of a year ago….June home sales, now reported at a 4.70 million annual rate, were revised from the 4.72 million annual rate indicated by last month’s report…the NAR also reported that the median sales price for all existing-home types was at a record $304,100 in July, 8.5% higher than in July a year earlier, which they report “marks 101 straight months of year-over-year gains.“…..the NAR press release, which is titled “Existing-Home Sales Continue Record Pace, Soar 24.7% 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 597,000 homes sold in July, up by 17.8% from the 507,000 homes that sold in June, and up 10.6% from the estimated 540,000 homes that sold in July of last year, so we can see there was a modest 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 rose 3.3%, from a revised record high of $294,500 in June to a new record of $304,100 in July, while the average home sales price was a record $337,500, up 2.6% from the $328,900 average selling price in June, and up 6.5% from the $316,800 average home sales price of July a year ago, with the regional average home sales prices ranging from a low of $272,000 in the Midwest to a high of $448,700 in the West, both of which are also record highs…..for additional commentary with long term graphs on this report, see “NAR: Existing-Home Sales Increased to 5.86 million in July” and “Comments on July Existing Home Sales” from Bill McBride at Calculated Risk.
See also:
July 2020 Headline Existing Home Sales Second Month Of Significant Sales Gain
June 2020 CoreLogic Single-Family Rent Index Growth Stalls To Lowest Rate In A Decade
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