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Tuesday, December 31, 2019

November 2019 Residential Sales, Inventory and Prices

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Sales of new single-family houses in November 2019 were at a seasonally adjusted annual rate of (SAAR) 719,000 units (735,000 expected). This is 1.3 percent (±11.0 percent)* above the revised October rate of 710,000 (originally 733,000) and 16.9 percent (±19.4 percent)* above the November 2018 SAAR of 615,000 units; the not-seasonally adjusted (NSA) year-over-year comparison (shown in the table above) was +18.2%. For longer-term perspectives, NSA sales were 48.2% below the “housing bubble” peak and 0.5% below the long-term, pre-2000 average.
The median sales price of new houses sold in November rose to $330,800 ($13,900 or +4.4% MoM); meanwhile, the average sales price jumped to $388,200 ($10,300 or +2.7%). Starter homes (defined here as those priced below $200,000) comprised 9.6% of the total sold, down from the year-earlier 11.4%; 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 November, down from 2.3% a year earlier.
* 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 November, single-unit completions increased by 39,000 units (+4.5%). Although sales ticked up (9,000 units; +1.3%) while completions fell, inventory for sale was unchanged in absolute terms but shrank in months-of-inventory (-0.1 month) terms. 
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Existing home sales retreated in November (90,000 units or -1.7%), to a SAAR of 5.35 million units. Inventory of existing homes for sale shrank in absolute (-130,000 units) and months-of-inventory (-0.2 month) terms. Because new-home sales rose while resales fell, the share of total sales comprised of new homes advanced to 11.8%. The median price of previously owned homes sold in November inched up to $271,300 ($300 or +0.1% MoM). 
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Housing affordability worsened (-1.3 percentage points) despite the median price of existing homes for sale in October falling by $800 (-0.3%; +6.2 YoY), to $273,600. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller CoreLogic Home Price indices rose at a not-seasonally adjusted monthly change of +0.1% (+3.3% YoY).
"October’s U.S. housing data continue to be reassuring,” said Craig Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices. “With October’s 3.3% increase in the national composite index, home prices are currently more than 15% above the pre-financial crisis peak reached July 2006. October’s results were broad-based, as both our 10- and 20-city composites rose. Of the 20 cities in the composite, only San Francisco saw a year-over-year price decline in October.
“At a regional level, Phoenix retains the top spot for the fifth consecutive month with October’s 5.8% year-over-year gain. The Southeast region was also strong, as Tampa, Charlotte, and Atlanta all rose by more than 4.0%.
“As was the case last month, after a long period of decelerating price increases, the national, 10-city, and 20-city composites all rose at a modestly faster rate in October compared to September. This stability was broad-based, reflecting data in 12 of 20 cities. It is, of course, still too soon to say whether this marks an end to the deceleration or is merely a pause in the longer-term trend.” 
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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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