Written by rjs, MarketWatch 666
March new and existing home sales
There were just two widely watched reports released this past week; the March report on new home sales from the Census bureau, and the Existing Home Sales Report for March from the National Association of Realtors (NAR.
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Also released this week was the Chicago Fed National Activity Index (CFNAI) for March, a weighted composite index of 85 different economic metrics, which rose to +1.71 in March, up from – 1.20 in February, after February’s index was revised down from the – 0.02 reported last month…as a result, the 3 month average of that index rose to +0.54 in March from a revised +0.07 in February, in an index where positive readings indicate that national economic activity has been above the historical trend over recent months.
This week also saw the release of another regional Fed manufacturing survey for April: the Kansas City Fed manufacturing survey for April, covering western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico, reported its broadest composite index rose to +31 in April, up from +26 in March, indicating a broad based expansion of that region’s manufacturing.
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New Home Sales Reported 20.7% Higher in March after Prior Months Revised Higher
The Census report on New Residential Sales for March (pdf) estimated that new single family homes were selling at a seasonally adjusted pace of 1,021,000 homes annually during the month, which was the highest sales rate since August 2006, 20.7 percent (±23.7 percent)* above the revised February annual sales rate of 846,000, and 66.8 percent (±36.7 percent) above the estimated annual rate that new homes were selling at during the initial Covid lockdowns in March of last year….the asterisk indicates that based on their small sampling, Census could not tell whether March new home sales rose or fell from home sales of February, with the figures in parenthesis representing the 90% confidence range for reported data in this report, which has the largest margin of error and is subject to the largest revisions of any census construction series….with this report, sales of new single family homes in February were revised from the annual rate of 775,000 reported last month to an annual rate of 846,000, and new home sales in January, initially reported at an annual rate of 923,000 and revised to a 948,000 annual rate last month, were revised up to a 1.010,000 a year rate with this report, while December’s annualized new home sales rate, initially reported at an annual rate of 842,000 and revised from the initial revision of 885,000 to a 919,000 a year rate last month, were revised to a 949,000 rate with this release…
The annual rates of sales reported here are seasonally adjusted after extrapolation from the estimates of canvassing Census field reps, which indicated that approximately 97,000 new single family homes sold in March, up from the estimated 70,000 new homes that sold in February and up from the 77,000 that sold in January…the raw numbers from Census field agents were further used to estimate that the median sales price of new houses sold in March was $330,800, down from the median sale price of $345,900 in February but up from the median sales price of $328,200 in March a year ago, while the average new home sales price was $397,800, uo from the $394,300 average sales price in February, and up from the average sales price of $375,400 in March a year ago….a seasonally adjusted estimate of 307,000 new single family houses remained for sale at the end of March, which represents a 3.6 month supply at the March sales rate, down from the 4.8 months of new home supply originally reported in February…for graphs and additional commentary on this report, see the following two posts by Bill McBride at Calculated Risk: New Home Sales Increase to 1,021,000 Annual Rate in March; Highest Since 2006. and A few Comments on March New Home Sales.
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Existing Home Sales Decrease 3.7% in March on Record High Prices
The National Association of Realtors (NAR) reported that existing home sales fell at a 3.7% rate from February to March on a seasonally adjusted basis, projecting that 6.01 million existing homes would sell over an entire year if the March home sales pace were extrapolated over that year, a pace that was still 12.3% above the annual sales rate projected in March of a year ago….February homes sales, now reported at a 6.24 million annual rate, were revised from the 6.22 annual rate they reported a month ago….the NAR also reported that the median sales price for all existing-home types was at a record high $329,100 in March, which was 17.2% higher than the median sales price of $280,700 reported for March a year earlier, which they report “marks 109 straight months of year-over-year gains“…..the NAR press release, which is titled “Housing Market Reaches Record-High Home Price and Gains in March“, is in easy to read plain English, so if you’re interested in a regional breakdown, or 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 usually look at the raw data overview (pdf) to see what actually happened during the month…this unadjusted data estimates that roughly 484,000 homes sold in March, up 33.2% from the 366,000 homes that sold in February, and up by 16.3% from the 416,000 homes that sold in March of last year, so we can see that it was just the effect of a large springtime seasonal adjustment that caused the headline to show a decrease….that same pdf indicates that the median home selling price for all housing types rose by 5.9%, from a revised $310,700 in February to $329,100 in March, while the average home sales price rose 3.8% to $355,200 from the $342,100 average sales price in February, and was up 12.2% from the $316,100 average home sales price of March a year ago…for 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 6.01 million in March and Comments on March Existing Home Sales.
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