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Sales of new
single-family houses in April 2017 were at a seasonally adjusted annual rate (SAAR)
of 569,000 units (604,000 expected).
This is 11.4 percent (±10.5 percent) below the revised March rate of 642,000
(originally 621,000), but is 0.5 percent (±11.3 percent)* above the April 2016 SAAR
of 566,000 units; the not-seasonally adjusted year-over-year comparison (shown
in the table above) was -1.8%. For a longer-term perspective, April sales were
59.0% below the “bubble” peak but 3.3% above the long-term, pre-2000 average.
The
median sales price of new houses sold in April 2017 was $309,200 (-$9,500 or
3.0%). The average sales price was $368,300 (-$17,100 or 4.4%). Starter homes
(those priced below $200,000) comprised 11.1% of the total sold, down from April
2016’s 18.2%, and a new record low for the month of April (since 2002); prior
to the Great Recession starter homes represented as much as 61% of total new-home
sales. Homes priced below $150,000 made up 1.9% of those sold in April, also a
new record low for that month of the year.
* 90% confidence interval includes zero.
The Census Bureau does not have sufficient statistical evidence to conclude
that the actual change is different from zero.
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As
mentioned in our post
about housing permits, starts and completions in April, single-unit completions
fell by 37,000 units (-4.5%). Since the decrease in sales outpaced that of completions,
new-home inventory expanded in both absolute (+4,000 units) and months-of-inventory
(+0.8 month) terms.
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Existing home sales
dropped by 130,000 units (-2.3%) in March, to a SAAR of 5.570 million units
(5.650 million expected).
Inventory of existing homes expanded in both absolute (+130,000 units) and months-of-inventory
(+0.4 month) terms. With new-home sales decreasing at a proportionately faster
rate than existing-home sales, the share of total sales comprised of new homes fell
back to 9.3%. The median price of previously owned homes sold in April increased
by $8,200 (+3.5%), to $244,800.
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Housing
affordability retreated for a fifth month as the median price of existing
homes for sale in March jumped by $8,000 (+3.5%; +6.6 YoY), to $237,800.
Concurrently, Standard &
Poor’s reported that the U.S. National Index in the S&P Case-Shiller CoreLogic
Home Price indices posted a not-seasonally adjusted monthly change of +0.8% (+5.8%
YoY) -- marking the fourth consecutive all-time high for the index.
“Home
prices continue rising with the S&P Corelogic Case-Shiller National Index
up 5.8% in the year ended March, the fastest pace in almost three years,” said David
Blitzer, Managing Director and Chairman of the Index Committee at S&P
Dow Jones Indices. “While there is some regional variation, prices are rising
across the United States. Half of the 20 cities tracked by the S&P
Corelogic Case-Shiller indices rose more than 6% from March 2016 to March 2017.
The smallest gain of 4.1%, in New York, was roughly double the rate of
inflation.
“Sales
of both new and existing homes, housing starts and the National Association of
Home Builders’ sentiment index are all trending higher. Over the last year,
analysts suggested that one factor pushing prices higher was the unusually low
inventory of homes for sale. People are staying in their homes longer rather
than selling and trading up. If mortgage rates, currently near 4%, rise
further, this could deter more people from selling and keep pressure on
inventories and prices. While prices cannot rise indefinitely, there is no way
to tell when rising prices and mortgage rates will force a slowdown in
housing.”
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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.
