Sales of new
single-family houses in August 2022 were at a seasonally adjusted annual rate
(SAAR) of 685,000 units (498,000 expected).
This is 28.8% (±18.3%) above the revised July rate of 532,000 (originally 511,000
units), but 0.1% (±16.5%)* below the August 2021 SAAR of 686,000 units; the
not-seasonally adjusted (NSA) year-over-year comparison (shown in the table
above) was 0.0%. For longer-term perspectives, NSA sales were 50.7% below the
“housing bubble” peak and 5.2% above the long-term, pre-2000 average.
The
median sales price of new houses sold in August 2022 was $436,800 (-6.3%, or $29,500). The average sales price was $521,800 (-6.3%
or $34,900). Homes priced at/above $750,000 were 12.7% of sales, up from the
year-earlier 9.1%.
* 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 August, single-unit completions ticked up by 4,000 units (+0.4%). Sales jumped (153,000 units), resulting in inventory for sale expanding on an absolute basis (+2,000 units) but shrinking in months-of-inventory terms (-2.3 months).
Existing home sales retreated for a seventh month in August (-0.4% or 20,000 units) to a SAAR of 4.80 million units (4.70 million expected). Inventory of existing homes for sale contracted in absolute terms (-20,000 units) but was unchanged on a months-of-inventory basis. Because resales retreated while new-home sales rose, the share of total sales comprised of new homes jumped to 12.5%. The median price of previously owned homes sold in August fell to $389,500 (-2.4% or $9,700).
Housing affordability nudged higher (+3.1 index points) as the median price
of existing homes for sale in July fell by $10,300 (-2.4% MoM; +10.6 YoY) to a
new record of $410,600. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller
CoreLogic Home Price indices declined at a not-seasonally adjusted monthly change
of -0.3% (+15.8% YoY) -- the first MoM drop since January 2019.
“Although
U.S. housing prices remain substantially above their year-ago levels, July’s
report reflects a forceful deceleration,” said Craig
Lazzara, Managing Director at S&P DJI. “For example, while the National
Composite Index rose by 15.8% in the 12 months ended July 2022, its
year-over-year price rise in June was 18.1%. The -2.3% difference between those
two monthly rates of gain is the largest deceleration in the history of the
index. We saw similar patterns in our 10-City Composite (up 14.9% in July vs.
17.4% in June) and our 20-City Composite (up 16.1% in July vs. 18.7% in June).
On a month-over-month basis, all three composites declined in July.
“The
theme of strong but decelerating prices was reflected across all 20 cities.
July’s year-over-year price change was positive for each one of the 20 cities,
with a median gain of 15.0%, but in every case July’s gain was less than
June’s. Prices declined in 12 cities on a month-to-month basis. Tampa (+31.8%)
narrowly edged Miami (+31.7%) to remain at the top of the league table for the
fifth consecutive month, with Dallas (+24.7%) holding on to third place. As has
been the case for the last several months, price growth was strongest in the
Southeast (+27.5%) and South (+26.9%).
“As the Federal Reserve continues to move interest rates upward, mortgage financing has become more expensive, a process that continues to this day. Given the prospects for a more challenging macroeconomic environment, 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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