Click image
for larger view
Click image
for larger view
Sales of new
single-family homes rose by a seasonally adjusted and annualized rate (SAAR) of
41,000 units (9.6 percent) to 468,000 in January; that was the fastest sales
rate since July 2008. Sales were 6.3 percent above year-earlier levels. Meanwhile,
the median price of new homes sold retreated (by $5,800 or 2.2 percent) to $260,100.
Because starts dropped while sales rose during January, the three-month average
starts-to-sales ratio nudged down to 1.48 (from 1.51). Click here
for our post on January housing permits, starts and completions.
Global
Economic Intersection (GEI) recently posted an interesting graph showing the number
of new-home sales as a ratio of the U.S. population. While population-adjusted
sales have moved off their post-Great Recession bottom, they remain below all previous
recession lows. “The bottom line,” GEI concluded, “is that the new home market
is in an extreme depression and the apparent bottoming process has been
dragging on for two years, if in fact the bottom has been reached. Recent
review of the Fed 2011 stress tests for banks has a new recession scenario that
would see home prices decline another 20 percent from here. It is unlikely that
the attempts to complete a bottom here could hold under those conditions.”
Click image
for larger view
Single-unit
completions rose more slowly (+17,000 units or 3.0 percent) than sales (+41,000
units or 9.6 percent) in January. New-home inventory remained stable in
absolute terms but fell by 0.5 month in months-of-inventory terms.
Click image
for larger view
Existing home sales
slumped again in January, falling by 250,000 units (-5.1 percent) to 4.62
million units (SAAR) -- the slowest rate in over a year. The National
Association of Realtors blamed
the harsh weather, low inventory, and the
rise in mortgage rates and home prices as likely culprits for the slowdown in
sales; we find it noteworthy that the weather was not blamed for January’s rise in new home sales. In any event, the
share of total sales comprised of new homes exceeded 9 percent for the first
time since November 2008. The median price of previously owned homes sold in January
retreated (by $8,800 or 4.5 percent), to $188,900.
Click image
for larger view
Housing
affordability degraded marginally in December because the median price of
existing homes for sale reversed course after five months of declines and rose
(by $2,600) to $197,900. Concurrently, Standard & Poor’s
reported that the 10- and 20-City Composites in the S&P/Case-Shiller Home
Price indices posted not-seasonally adjusted monthly decreases of 0.1 percent or
less in December (respectively, +13.6 and +13.4 percent relative to a year
earlier).
"The
S&P/Case-Shiller Home Price Index ended its best year since 2005," observed
David
Blitzer, Chair of the Index Committee at S&P Dow Jones Indices.
"However, gains are slowing from month-to-month and the strongest part of
the recovery in home values may be over. Year-over-year values for the two
monthly Composites weakened and the quarterly National Index barely improved.
"Recent
economic reports suggest a bleaker picture for housing,” Blitzer continued. “Some
of the weakness reflects the cold weather in much of the country. However,
higher home prices and mortgage rates are taking a toll on affordability.
Mortgage default rates…are back to their pre-crisis levels but bank lending
standards remain strict."
Click image
for larger view
The foregoing comments represent the
general economic views and analysis of Delphi
Advisors, and are provided solely for the purpose of information, instruction
and discourse. They do not constitute a solicitation or recommendation
regarding any investment.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.