Click image
for larger view
Click image
for larger view
Sales of new
single-family homes turned lower in September, falling by 61,000 units (-11.5%),
to a seasonally adjusted and annualized rate (SAAR) of 468,000 units -- well below
the 549,000 expected.
The drop was in addition to downward revisions to July and August data
(combined -27,000 units), and resulted in the largest month-to-month retreat
since July 2013 and the first year-over-year decline in not seasonally adjusted
sales since November 2014. Year-to-date (YTD), sales were 16.7% above the same
months in 2014. For perspective, September sales were roughly 66% below the
“bubble” peak and about 31% below the long-term, pre-2000 average.
Meanwhile,
the median price of new homes sold jumped by $7,800 (+2.7%) to $296,900. The average
price of homes sold, by contrast, leapt by a more robust $21,100 (+6.2%) -- to
$364,100 -- implying that a significant proportion of total sales were high-end
homes. Because sales decreased while single-family starts increased, the
three-month average ratio of starts to sales rose to 1.50 -- above the average
(1.41) since January 1995.
Click image
for larger view
As
mentioned in our post
about housing permits, starts and completions in September, single-unit completions
fell by 12,000 units (-1.8%). Because completions retreated more slowly than
sales, new-home inventory expanded in absolute terms (+10,000 units) and months
of inventory (+0.9 month).
Click image
for larger view
Existing home sales
gained in September (+250,000 units or 4.7%) to 5.55 million units (SAAR); that
result was above expectations
of 5.35 million. Because sales of new homes fell while existing homes increased,
the share of total sales comprised of new homes dropped to 7.8%. The median
price of previously owned homes sold in September declined another $6,600 (-2.9%)
to $221,900. Inventory of existing homes contracted in both absolute (-60,000
units) and months-of-inventory terms (-0.3 month).
Click image
for larger view
Housing
affordability marginally improved in August, as the median price of
existing homes for sale retreated by $3,200 (-1.4%) to $230,200. 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 +0.3% (+4.7% compared to a
year earlier).
“Home
prices continue to climb at a 4% to 5% annual rate across the country,” said David
Blitzer, Managing Director and Chairman of the Index Committee for S&P
Dow Jones Indices. “Most other recent housing indicators also show strength.
Housing starts topped an annual rate of 1.2 million units in the latest report
with continuing strength in both single family homes and apartments. The
National Association of Home Builders sentiment survey, reflecting current
strength, reached the highest level since 2005, before the housing collapse.
Sales of existing homes are running about 5.5 million units annually with
inventories of about five months of sales. However, September new home sales took
an unexpected and sharp drop as low inventories were cited as a possible cause.
“A
notable part of today’s economy is the continuing low inflation rate; in the
year to September, consumer prices were unchanged. Even excluding food and
energy, the core inflation was 1.9%. One result is that a 5% price increase in
the value of a house means more today than it did in 2005-2006, the peak of the
housing boom when the inflation rate was higher. The rebound from the recent
lows was faster than the 1997-2005 housing boom, and also much less driven by
inflation.”
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.