Sales of new
single-family houses in November 2020 were at a seasonally adjusted annual rate
(SAAR) of 841,000 units (988,000 expected).
This is 11.0% (±9.5%) below the revised October rate of 945,000 (originally
999,000 units), but 20.8% (±19.5%) above the November 2019 SAAR of 696,000
units; the not-seasonally adjusted (NSA) year-over-year comparison (shown in
the table above) was +18.0%. For longer-term perspectives, NSA sales were 39.5%
below the “housing bubble” peak but 12.9% above the long-term, pre-2000 average.
The median sales price of new houses sold in November fell ($2,200 or -0.7% MoM) to $335,300; meanwhile, the average sales price rose to $390,100 ($6,800 or +1.8% MoM). Starter homes (defined here as those priced below $200,000) comprised 5.8% of the total sold, down from the year-earlier 10.0%; prior to the Great Recession starter homes represented as much as 61% of total new-home sales. Homes priced below $150,000 made up 0.7% of those sold in November, down from 2.0% a year earlier.
As mentioned in our post about housing permits, starts and completions in November, single-unit completions decreased by 5,000 units (-0.6%). Because sales (-104,000 units; -11.0%) fell faster than completions, inventory for sale rose in both absolute (+5,000 units) and months-of-inventory (+0.5 month) terms.
Existing home sales declined in November (170,000 units or -2.5%), to a SAAR of 6.69 million units (6.715 million expected). Inventory of existing homes for sale contracted in both absolute (-140,000 units) and months-of-inventory terms (-0.2 month). Because resales fell proportionally more slowly than new-home sales, the share of total sales comprised of new homes dropped to 11.2%. The median price of previously owned homes sold in November retreated to $310,800 ($2,300 or -0.7% MoM).
Housing
affordability deteriorated slightly (-0.2 percentage point) as the median
price of existing homes for sale in October rose by $1,700 (+0.5%
MoM; +16.0 YoY), to a new high of $317,700. 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 +1.4% (+8.4% YoY).
“The
surprising strength we noted in last month’s report continued into October’s
home price data,” said Craig
Lazzara, Managing Director and Global Head of Index Investment Strategy at
S&P Dow Jones Indices. “The National Composite Index gained 8.4% relative
to its level a year ago, accelerating from September’s 7.0% increase. The 10-
and 20-City Composites (up 7.5% and 7.9%, respectively) also rose more rapidly
in October than they had done in September. The housing market’s strength was
once again broadly-based: all 19 cities for which we have October data rose,
and all 19 gained more in the 12 months ended in October than they had gained
in the 12 months ended in September.
“We’ve
noted before that a trend of accelerating increases in the National Composite
Index began in August 2019 but was interrupted in May and June, as
COVID-related restrictions produced modestly-decelerating price gains. Since
June, our monthly readings have shown accelerating growth in home prices, and
October’s results emphatically emphasize that trend. The last time that the
National Composite matched this month’s 8.4% growth rate was more than six and
a half years ago, in March 2014. Although the full history of the pandemic’s
impact on housing prices is yet to be written, the data from the last several
months are consistent with the view that COVID has encouraged potential buyers
to move from urban apartments to suburban homes. We’ll continue to monitor what
the data can tell us about this question.
“Phoenix’s 12.7% increase led all cities for the 17th consecutive month. Seattle (11.7%) and San Diego (11.6%) repeated in second and third place. Prices were strongest in the West and Southwest regions, but even the comparatively weak Midwest and Northeast (up 7.7% and 7.9% respectively) performed creditably well.”
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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