Sales of new
single-family houses in May 2022 were at a seasonally adjusted annual rate (SAAR)
of 696,000 units (587,000 expected). This
is 10.7% (±18.9%)* above the revised April rate of 629,000 (originally 591,000
units), but 5.9% (±22.0%)* below the May 2021 SAAR of 740,000 units; the
not-seasonally adjusted (NSA) year-over-year comparison (shown in the table
above) was -3.1%. For longer-term perspectives, NSA sales were 49.9% below the “housing
bubble” peak but 20.5% above the long-term, pre-2000 average.
The
median sales price of new houses sold in May slipped (-1.3% or $5,700) to
$449,000. The average sales price tumbled
(-10.2% or $58,100) to $511,400. Homes priced at/above $750,000 were 14.3% of
sales, up from the year-earlier 9.2%.
* 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 May, single-unit completions rose by 28,000 units (+2.8%). Sales also advanced (67,000 units; +10.7%), resulting in inventory for sale expanding in absolute terms (7,000 units) but declining in months-of-inventory (-0.6 month) terms.
Existing home sales retreated for a fourth month in May (190,000 units or -3.4%) to a SAAR of 5.41 million units (-4.5% expected). Inventory of existing homes for sale expanded in both absolute (+13,000 units) and months-of-inventory (+0.4 month) terms. Because resales retreated while new home sales, the share of total sales comprised of new homes rose to 11.4%. The median price of previously owned homes sold in May advanced to a record $407,600 ($12,100 or +3.1% MoM).
Housing affordability dropped (15.0 index points) as the median price of
existing homes for sale in April rose by $16,300 (+4.3% MoM; +14.8 YoY) to $397,600.
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 +2.1% (+20.4% YoY).
“April
2022 showed initial (although inconsistent) signs of a deceleration in the
growth rate of U.S. home prices,” said Craig
Lazzara, Managing Director at S&P DJI. “The National Composite Index
rose by 20.4% for the 12 months ended April 2022; this represents a slight
deceleration from March’s 20.6% reading. The 10- and 20-City Composites were up
19.7% and 21.2%, respectively, modestly ahead of their gains in March. Despite
the deceleration of the National Composite and the modest acceleration for the
10- and 20-City Composites, these growth rates are extremely strong by
historical standards – at or above the 99th percentile in all three cases.
“We
continue to observe very broad strength in the housing market, as all 20 cities
notched double-digit price increases for the 12 months ended in April. April’s
price increase ranked in the top quintile of historical experience for every
city, and in the top decile for 19 of them. In contrast with the past five
months, when prices in most cities accelerated, in April only nine cities saw
prices rise faster than they had done in March. There’s a regional pattern
among the nine, as all five cities in our South composite (Atlanta, Charlotte,
Dallas, Miami, and Tampa) are represented there.
“Tampa
(+35.8%) was the fastest growing city for the second consecutive month, with
Miami (+33.3%) and long-time leader Phoenix (+31.3%) in second and third
positions. Prices were strongest in the South (+30.6%) and Southeast (+30.5%).
Even the comparatively weak Midwest (+13.8%) and Northeast (+14.0%) showed
double-digit gains.
“We noted last month that mortgage financing has become more expensive as the Federal Reserve ratchets up interest rates, a process that had only just begun when April data were gathered. A more-challenging macroeconomic environment may not support extraordinary home price growth for much longer.”
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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