Sales of new
single-family houses in July 2022 were at a seasonally adjusted annual rate (SAAR)
of 511,000 units (575,000 expected).
This is 12.6% (±16.9%)* below the revised June rate of 585,000 (originally
590,000 units) and 29.6% (±10.9%) below the July 2021 SAAR of 726,000 units;
the not-seasonally adjusted (NSA) year-over-year comparison (shown in the table
above) was -32.3%. For longer-term perspectives, NSA sales were 63.2% below the
“housing bubble” peak and 19.7% below the long-term, pre-2000 average.
The
median sales price of new houses sold in July 2022 was $439,400 (+5.9%, or
$24,500). The average sales price was
$546,800 (+19.6% or $89,500). Homes priced at/above $750,000 were 11.9% of
sales, up from the year-earlier 9.7%.
* 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 July, single-unit completions fell by 8,000 units (-0.8%). Sales also retreated (74,000 units), resulting in inventory for sale expanding in absolute (+14,000 units) and months-of-inventory (+1.7 months) terms.
Existing home sales retreated for a sixth month in July (-5.9% or 300,000 units) to a SAAR of 4.81 million units (on par with expectations). Inventory of existing homes for sale expanded in both absolute (+60,000 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 9.6%. The median price of previously owned homes sold in July fell to $403,800 (-2.4% or $10,000).
Housing affordability dropped (3.7 index points) as the median price of
existing homes for sale in June rose by $7,900 (+1.9% MoM; +13.3 YoY) to a new
record of $423,300. 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 +0.6% (+18.0% YoY).
“The
deceleration in U.S. housing prices that we began to observe several months ago
continued in June 2022, as the National Composite Index rose by 18.0% on a
year-over-year basis,” said Craig Lazzara, Managing Director at S&P DJI.
“Relative to May’s 19.9% gain (and April’s 20.6%), prices are clearly
increasing at a slower rate. This pattern is consistent with our 10-City
Composite (up 17.4% in June vs. 19.1% in May) and our 20-City Composite (up
18.6% in June vs. 20.5% in May). It’s important to bear in mind that
deceleration and decline are two entirely different things, and that prices are
still rising at a robust clip. June’s growth rates for all three composites are
at or above the 95th percentile of historical experience. For the first six
months of 2022, in fact, the National Composite is up 10.6%. In the last 35
years, only four complete years have witnessed increases that large.
“The
market’s strength continues to be broadly based, as all 20 cities recorded
double-digit price increases for the 12 months ended in June. In 19 out of 20
cases, however, June’s reading was less than May’s, showing the impact of
deceleration at the regional level. Tampa (+35.0%) was the fastest growing city
for the fourth consecutive month, with Miami (+33.0%) and Dallas (+28.2%)
holding on to silver and bronze positions. Prices continued strongest in the
Southeast (+29.6%) and South (+29.3%).
“We’ve noted previously that mortgage financing has become more expensive as the Federal Reserve ratchets up interest rates, a process that continued as our June data were gathered. As the macroeconomic environment continues to be challenging, home prices may well continue to decelerate.”
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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