Sales of new
single-family houses in June 2022 were at a seasonally adjusted annual rate (SAAR)
of 590,000 units (664,000 expected). This
is 8.1% (±15.0%)* below the revised May rate of 642,000 (originally 696,000
units) and 17.4% (±11.6%) below the June 2021 SAAR of 714,000 units; the
not-seasonally adjusted (NSA) year-over-year comparison (shown in the table
above) was -8.1%. For longer-term perspectives, NSA sales were 57.5% below the “housing
bubble” peak and 6.3% below the long-term, pre-2000 average.
The
median sales price of new houses sold in June slumped (-9.5% or $42,100) to $402,400.
The average sales price also tumbled (-11.1% or $57,200) to $456,800. Homes
priced at/above $750,000 were 4.1% of sales, down from the year-earlier 6.6%.
* 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 June, single-unit completions fell by 43,000 units (-4.1%). Sales also retreated (52,000 units; -8.1%), resulting in inventory for sale expanding in absolute (+11,000 units) and months-of-inventory (+0.9 month) terms.
Existing home sales retreated for a fifth month in June (290,000 units or -5.4%) to a SAAR of 5.12 million units (5.395 million expected). Inventory of existing homes for sale expanded in both absolute (+111,000 units) and months-of-inventory (+0.4 month) terms. Because resales retreated at a slower rate than new-home sales, the share of total sales comprised of new homes slipped to 10.3%. The median price of previously owned homes sold in June advanced to a record $416,000 ($7,600 or +1.9% MoM).
Housing affordability dropped (5.6 index points) as the median price of
existing homes for sale in May rose by $12,500 (+3.1% MoM; +14.6 YoY) to $414,200.
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 +1.9% (+19.7% YoY).
“Housing
data for May 2022 continued strong, as price gains decelerated slightly from
very high levels,” said Craig
Lazzara, Managing Director at S&P DJI. “The National Composite Index
rose by 19.7% for the 12 months ended May, down from April’s 20.6%
year-over-year gain. We see a similar pattern in the 10-City Composite (up
19.0% in May vs. 19.6% in April) and in the 20-City Composite (+20.5% vs.
+21.2%). Despite this deceleration, growth rates are still extremely robust,
with all three composites at or above the 98th percentile historically.
“The
market’s strength continues to be broadly based, as all 20 cities recorded
double-digit price increases for the 12 months ended in May. May’s gains ranked
in the top quintile of historical experience for 19 cities, and in the top
decile for 17 of them. However, at the city level we also see evidence of
deceleration. Price gains for May exceeded those for April in only four cities.
As recently as February of this year, all 20 cities were accelerating.
“Tampa
(+36.1%) was the fastest growing city for the third consecutive month, with
Miami (+34.0%) in second place. In May, Dallas fought its way into the top
three with a gain of 30.8%. Prices continued strongest in the South and
Southeast, both of which recorded 30.7% gains year-over-year.
“We’ve noted previously that mortgage financing has become more expensive as the Federal Reserve ratchets up interest rates, a process that was ongoing as our May data were gathered. Accordingly, 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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