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Sales of new
single-family homes in October edged up by 3,000 units (+0.7%) relative to the
previous month, to a seasonally adjusted and annualized rate (SAAR) of 458,000.
Data for September was revised down from 467,000 to 435,000 units, while data
for August was trimmed further (to 453,000 -- considerably below the original 504,000
units). Sales in October were 2.8% above year-earlier levels. Meanwhile, the
median price of new homes sold shot up by $43,300 (+16.6%) to $305,000, more
than recouping September’s $26,000 drop; October's median price is well above the previous high of $279,300 set back in April 2013. The average price of homes
sold jumped by an even more incredible $86,900, as approximately half of the
homes sold were valued at $300,000 or higher. Although single-family starts rose
faster than sales in October, the three-month average ratio of starts to sales dropped
to 1.47. Click here
for our post on October’s housing permits, starts and completions.
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Single-unit
completions plummeted by 47,000 units (-7.4%) in October. Nonetheless, new-home
inventory expanded both in absolute (+2,000 units) and months-of-inventory (0.1
month) terms.
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Existing home sales
advanced in October (+80,000 units or 1.5%) to 5.26 million units (SAAR). With
sales of new homes rising more slowly than existing homes, the share of total
sales comprised of new homes slipped back to 8.0%. The median price of previously
owned homes sold in October dropped again (-$800 or 0.4%) to $208,300.
Inventory of existing homes shrank in both absolute (-60,000 units) and months-of-inventory
terms (0.2 month).
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Housing
affordability improved again in September because the median price of
existing homes for sale fell by $8,800 (-4.0%) to $210,300. Concurrently, Standard & Poor’s
reported that the U.S. National Index in the S&P/Case-Shiller Home Price indices
posted a not-seasonally adjusted monthly change of -0.1% in September but a +4.8%
change relative to a year earlier.
“The
overall trend in home price increases continues to slow down,” said David
Blitzer, chair of the Index Committee at S&P Dow Jones Indices. “The
National Index reported its first negative monthly returns since December 2013
and its worst annual returns since December 2012 due to weaknesses in
Washington D.C. and Boston. The West and Southwest, previously strong regions,
are seeing price gains fade. The only region showing any sustained strength is
the Southeast led by Florida; price gains are also evident in Atlanta and
Charlotte.
“Other
housing statistics paint a mixed to slightly positive picture,” Blitzer
continued. “Housing starts held above one million at annual rates on gains in
single family homes, sales of existing homes are gaining, builders’ sentiment
is improving, foreclosures continue to be worked off and mortgage default rates
are at pre-crisis levels. With the economy looking better than a year ago, the
housing outlook for 2015 is stable to slightly better.”
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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.
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