Sales of new
single-family houses in January 2022 were at a seasonally adjusted annual rate (SAAR)
of 801,000 units (804,000 expected).
This is 4.5 percent (±16.2 percent)* below the revised December rate of 839,000
(originally 811,000 units) and 19.3 percent (±15.2 percent) below the January
2021 SAAR of 993,000 units; the not-seasonally adjusted (NSA) year-over-year
comparison (shown in the table above) was -16.9%. For longer-term perspectives,
NSA sales were 42.3% below the “housing bubble” peak but 22.4% above the
long-term, pre-2000 average.
The
median sales price of new houses sold in January 2022 jumped by 7.0% (+$27,800),
to $423,300. The average sales price rose
by 3.0% (+$14,600), to a record-high $496,900. Homes priced at/above $750,000
were 9.4% of sales, nearly double the year-earlier 5.2%.
* 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 January, single-unit completions fell by 73,000 units (-7.3%). Sales also retreated (38,000 units; -4.5%), resulting in inventory for sale expanding in both absolute (12,000 units) and months-of-inventory (+0.5 month) terms.
Existing home sales rose in January (410,000 units or +6.7%), to a SAAR of 6.50 million units (6.088 million expected). Inventory of existing homes for sale contracted in absolute (-20,000 units) and months-of-inventory (-0.1 month) terms. Because new home sales declined resales increased, the share of total sales comprised of new homes slipped to 11.0%. The median price of previously owned homes sold in January dipped to $350,300 ($4,300 or -1.2% MoM).
Housing affordability fell as the median price of existing homes for
sale in December advanced by $3,000 (+0.8% MoM; +16.1 YoY), to $364,300.
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).
“This
month’s report covers December 2021, and therefore brings our reporting on
calendar 2021 to a close,” said Craig
Lazzara, Managing Director at S&P DJI. “For the year, the National
Composite Index recorded a gain of 18.8%. This is the highest calendar year
increase in 34 years of data, and substantially ahead of 2020’s 10.4% gain. The
10- and 20-City Composites rose 17.0% and 18.6%, respectively -- a record for
the 20-City Composite, and the second-best year ever for the 10-City Composite.
“We
have noted that for the past several months, home prices have been rising at a
very high, but decelerating rate. The deceleration paused in December, as
year-over-year changes in all three composite indices were slightly ahead of
their November levels. December’s 18.8% gain for the National Composite is the
fifth-highest reading in history.
“We
continue to see very strong growth at the city level. All 20 cities saw price
increases in 2021, and prices in all 20 are at their all-time highs. December’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
32.5% increase led all cities for the 31st consecutive month. Tampa (+29.4%)
and Miami (+27.3%) continued in second and third place in December. Prices were
strongest in the South (+25.7%) and Southeast (+25.6%), 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 simply represents an acceleration of purchases that would have occurred over the next several years rather than 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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