Sales of new
single-family houses in December 2022 were at a seasonally adjusted annual rate
(SAAR) of 616,000 units (614,000 expected).
This is 2.3% (±18.5%)* above the revised November rate of 602,000, but 26.6%
(±13.2%) below the December 2021 estimate of 839,000 units; the not-seasonally
adjusted (NSA) year-over-year comparison (shown in the table above) was -23.0%.
For longer-term perspectives, NSA sales were 55.7% below the “housing bubble”
peak and 10.1% below the long-term, pre-2000 average.
An
estimated 645,000 new homes were sold in 2022. This is 16.3% (±3.8%) below the
2021 figure of 771,000.
The
median sales price of new houses sold in December 2022 was $442,100 (-3.7%, or
$16,900). The average sales price was $528,400 (essentially unchanged at -$200).
Homes priced at/above $750,000 comprised 8.5% of sales, down from the
year-earlier 11.5%.
* 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 November, single-unit completions fell by 87,000 units (-8.0%). Sales rose (14,000 units), resulting in inventory for sale unchanged in absolute terms but shrinking in months-of-inventory (-2.0 months) terms.
Existing home sales retreated for an eleventh month in December (-1.5% or 60,000 units) to a SAAR of 4.02 million units (3.97 million expected). Inventory of existing homes for sale contracted in both absolute (-50,000 units) and months-of-inventory (-0.4 month) terms. Because resales retreated while new-home sales rose, the share of total sales comprised of new homes increased to 13.3%. The median price of previously owned homes sold in November dropped to $366,900 (-1.5% or $5,700).
Housing affordability bumped modestly higher (+4.2 index points) as the
median price of existing homes for sale in November fell by $7,900 (-2.1%
MoM; +3.2 YoY) to $376,700. 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 -0.6% (+7.7% YoY).
“November
2022 marked the fifth consecutive month of declining home prices in the U.S.,”
said Craig
Lazzara, Managing Director at S&P DJI. “For example, the National
Composite Index fell -0.6% for the month, reflecting a -3.6% decline since the
market peaked in June 2022. We saw comparable patterns in our 10- and 20-City
Composites, both of which stand more than -5.0% below their June peaks. These
declines, of course, came after very strong price increases in late 2021 and
the first half of 2022. Despite its recent weakness, on a year-over-year basis
the National Composite gained 7.7%, which is in the 74th percentile of
historical performance levels.
“All
20 cities in our November report showed price declines on a month-over-month
basis, with a median decline of -0.8%. Moreover, for all 20 cities,
year-over-year gains in November were lower than those of October, with a
median year-over-year increase of 6.4%. Interestingly, home prices in San
Francisco were down by -1.6% year-over-year, the first negative result for any
city since San Francisco’s -0.4% decline in October 2019. This is the worst
year-over-year result for San Francisco in more than 10 years (since a -3.0%
result in March 2012). West coast weakness was not limited to California, as
San Francisco was followed by Seattle (+1.5%) and Portland (+3.9%) at the
bottom of the league table.
“In
contrast, November’s best-performing cities were clustered in the Southeast.
Miami (+18.4%) was the best performer, followed by Tampa (+16.9%). November is
the eighth consecutive month that one of our Florida cities has been the
national leader. The month’s bronze medal went to Atlanta (+12.7%), narrowly
edging out Charlotte (+12.6%). Unsurprisingly, the Southeast (+15.1%) and South
(+14.3%) were the strongest regions and the West (+4.0%) was the weakest.
“As the Federal Reserve moves interest rates higher, mortgage financing continues to be a headwind for home prices. Economic weakness, including the possibility of a recession, would also constrain potential buyers. Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken.”
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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