Sales of new
single-family houses in December 2021 were at a seasonally adjusted annual rate
(SAAR) of 811,000 units (760,000 expected). This is 11.9% (±20.3%)* above the revised
November rate of 725,000 (originally 744,000 units), but 14.0% (±16.6%)* below
the December 2020 SAAR of 943,000 units; the not-seasonally adjusted (NSA)
year-over-year comparison (shown in the table above) was -9.5%. For longer-term
perspectives, NSA sales were 41.6% below the “housing bubble” peak but 9.0%
above the long-term, pre-2000 average.
An
estimated 762,000 new homes were sold in 2021. This is 7.3% (±5.1%) below the
2020 SAAR of 822,000 (-7.1% YoY NSA).
The
median sales price of new houses sold in December 2021 fell by 9.2% (-$38,400),
to $377,700. The average sales price retreated
by 4.6% (-$22,000), to $457,300. Homes priced at/above $750,000 were 7.0% of
sales, more than double the year-earlier 3.2%.
* 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 December, single-unit completions rose by 37,000 units (+3.9%). Sales advanced (86,000 units; +11.9%), with inventory for sale expanding in absolute terms (6,000 units) but contracting (-0.6 month) in months-of-inventory terms.
Existing home sales fell in December (300,000 units or -4.6%), to a SAAR of 6.18 million units (6.40 million expected). Inventory of existing homes for sale contracted in absolute (-200,000 units) and months-of-inventory (-0.3 month) terms. Because resales declined while new-home sales increased, the share of total sales comprised of new homes jumped to 11.6%. The median price of previously owned homes sold in December rose to $358,000 ($3,600 or +1.0% MoM).
Housing affordability fell as the median price of existing homes for
sale in November advanced by $3,100 (-0.9% MoM; +14.9 YoY), to $362,600.
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 +0.9% (+18.8% YoY).
“For
the past several months, home prices have been rising at a very high, but
decelerating, rate. That trend continued in November 2021,” said Craig J.
Lazzara, Managing Director at S&P DJI. “The National Composite Index rose
18.8% from year-ago levels, and the 10- and 20-City Composites gained 16.8% and
18.3%, respectively. In all three cases, November’s gains were less than
October’s. Despite this deceleration, it’s important to remember that
November’s 18.8% gain was the sixth-highest reading in the 34 years covered by
our data (the top five were the months immediately preceding November).
“We
continue to see very strong growth at the city level. All 20 cities saw price
increases in the year ended November 2021, and prices in 19 cities are at their
all-time highs. November’s price increase ranked in the top quintile of
historical experience for 19 cities, and in the top decile for 16 of them.
“Phoenix’s
32.2% increase led all cities for the 30th consecutive month. Tampa (+29.0%)
and Miami (+26.6%) continued in second and third place in November, narrowly
edging out Las Vegas, Dallas, and San Diego. Prices were strongest in the South
and Southeast (both +25.0%), but every region continued to log impressive
gains.
“We have previously suggested that the strength in the U.S. housing market is being driven in part by a change in locational preferences as households react to the COVID pandemic. More data will be required to understand whether this demand surge represents an acceleration of purchases that would have occurred over the next several years or reflects a more permanent secular change. In the short term, meanwhile, we should soon begin to see the impact of increasing mortgage rates on home prices.”
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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