Sales of new
single-family houses in April 2022 were at a seasonally adjusted annual rate (SAAR)
of 591,000 units (750,000 expected).
This is 16.6% (±10.4%) below the revised March rate of 709,000 (originally
763,000 units) and 26.9% (±13.7%) below the April 2021 SAAR of 809,000 units;
the not-seasonally adjusted (NSA) year-over-year comparison (shown in the table
above) was -28.4%. For longer-term perspectives, NSA sales were 57.5% below the
“housing bubble” peak but 1.4% above the long-term, pre-2000 average.
The
median sales price of new houses sold in April rose by 3.6% (+$15,100), to a
new record of $450,600. The average
sales price jumped by 9.1% (+$47,800), to a record-high $570,300. Homes priced
at/above $750,000 were 15.1% of sales, up from the year-earlier 6.8%.
* 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 April, single-unit completions declined by 52,000 units (-4.9%). Sales retreated (118,000 units; -16.6%), resulting in inventory for sale expanding in both absolute (34,000 units) and months-of-inventory (+2.1 month) terms.
Existing home sales retreated in April (140,000 units or -2.4%) to a SAAR of 5.61 million units (5.65 million expected). Inventory of existing homes for sale expanded in absolute (+100,000 units) and months-of-inventory (+0.3 month) terms. Because new home sales retreated by a larger margin than resales, the share of total sales comprised of new homes dropped to 9.5%. The median price of previously owned homes sold in April advanced to a record $391,200 ($16,400 or +4.4% MoM).
Housing affordability dropped (10.6 index points) as the median price of
existing homes for sale in March rose by $16,000 (+4.4% MoM; +15.2 YoY), to $382,000.
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 +2.6% (+20.6% YoY).
“Those
of us who have been anticipating a deceleration in the growth rate of U.S. home
prices will have to wait at least a month longer,” said Craig Lazzara, Managing
Director at S&P DJI. “The National Composite Index recorded a gain of 20.6%
for the 12 months ended March 2022; the 10- and 20-City Composites rose 19.5%
and 21.2%, respectively. For both National and 20-City Composites, March’s
reading was the highest year-over-year price change in more than 35 years of
data, with the 10-City growth rate at the 99th percentile of its own history.
“The
strength of the Composite indices suggests very broad strength in the housing
market, which we continue to observe. All 20 cities saw double-digit price
increases for the 12 months ended in March, and price growth in 17 cities
accelerated relative to February’s report. March’s price increase ranked in the
top quintile of historical experience for every city, and in the top decile for
19 of them.
“For
the first time in nearly three years, the city with the most rapid growth in
housing prices was not Phoenix. In March, Tampa led all cities with a gain of
34.8%, with Phoenix (32.4%) and Miami (32.0%) taking silver and bronze honors.
As was the case last month, prices were strongest in the South (+29.8%) and
Southeast (+29.6%), with every region continuing to show impressive gains.
“Mortgages are becoming more expensive as the Federal Reserve has begun to ratchet up interest rates, suggesting that the macroeconomic environment may not support extraordinary home price growth for much longer. Although one can safely predict that price gains will begin to decelerate, the timing of the deceleration is a more difficult call.”
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.
