Sales of new
single-family houses in September 2021 were at a seasonally adjusted annual
rate (SAAR) of 800,000 units (760,000 expected).
This is 14.0% (±17.9%)* above the revised August rate of 702,000 (originally 740,000
units), but 17.6% (±12.1%) below the September 2020 SAAR of 971,0000 units; the
not-seasonally adjusted (NSA) year-over-year comparison (shown in the table
above) was -15.6%. For longer-term perspectives, NSA sales were 42.4% below the
“housing bubble” peak but 24.3% above the long-term, pre-2000 average.
The
median sales price of new houses sold in September rose by $7,300 (+1.8%) to a record-high
$408,800; meanwhile, the average sales price also increased to $451,700 ($4,800
or +1.1% MoM). Starter homes (defined here as those priced below $200,000)
comprised 2.2% of the total sold, down from the year-earlier 5.7%; prior to the
Great Recession starter homes represented as much as 61% of total new-home sales.
Homes priced below $150,000 were less than 0.6% of sales, essentially unchanged
from 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.
As mentioned in our post about housing permits, starts and completions in September, single-unit completions were unchanged. Although sales increased (98,000 units; +14.0%), inventory for sale was unchanged in absolute terms but decreased in months-of-inventory (-0.9 month) terms.
Existing home sales jumped in September (410,000 units or +7.0%), to a SAAR of 6.29 million units (6.03 million expected). Inventory of existing homes for sale contracted in absolute (10,000 units) and months-of-inventory terms (-0.2 month). Because resales rose at a slower pace than new-home sales, the share of total sales comprised of new homes increased to 11.3%. The median price of previously owned homes sold in September fell to $352,800 ($4,900 or -1.4% MoM).
Housing
affordability rose by 0.7 percentage point as the median price of existing
homes for sale in August dropped by $2,800 (-0.8% MoM; +15.6 YoY), to
$363,800. 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 +1.2% (+19.8% YoY).
“The
U.S. housing market showed continuing strength in August 2021,” said Craig
Lazzara, Managing Director and Global Head of Index Investment Strategy at
S&P DJI. “Every one of our city and composite indices stands at its
all-time high, and year-over-year price growth continues to be very strong,
although moderating somewhat from last month’s levels.
“In
August 2021, the National Composite Index rose 19.84% from year-ago levels,
marginally ahead of July’s 19.75% increase. This slowing acceleration was also
evident in our 10- and 20-City Composites, which rose 18.6% and 19.7%
respectively, modestly less than their rates of gain in July. Price gains were
once again broadly distributed, as all 20 cities rose, although in most cases
at a slower rate than had been the case a month ago.
“We
have previously suggested that the strength in the U.S. housing market is being
driven in part by a reaction to the COVID pandemic, as potential buyers move
from urban apartments to suburban homes. More data will be required to
understand whether this demand surge represents an acceleration of purchases
that would have occurred anyway over the next several years, or reflects a
secular change in locational preferences. August’s data are consistent with
either explanation. August data also suggest that the growth in housing prices,
while still very strong, may be beginning to decelerate.
“Phoenix’s 33.3% increase led all cities for the 27th consecutive month. San Diego (+26.2%) continued in second place, but in August, Tampa (+25.9%) edged Dallas and Seattle for the bronze medal. As has been the case for the last several months, prices were strongest in the Southwest (+24.1%), but every region logged double-digit gains.”
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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