Sales of new
single-family houses in January 2023 were at a seasonally adjusted annual rate (SAAR)
of 670,000 units (617,000 expected).
This is 7.2% (±20.4%)* above the revised December rate of 625,000 (originally
616,000 units), but 19.4% (±13.1%) below the January 2022 estimate of 831,000
units; the not-seasonally adjusted (NSA) year-over-year comparison (shown in
the table above) was -15.7%. For longer-term perspectives, NSA sales were 51.8%
below the “housing bubble” peak and 12.9% above the long-term, pre-2000 average.
The
median sales price of new houses sold in January 2023 was $427,500 (-8.2%, or $38,100).
The average sales price was $474,400 (-12.0, or -$69,800). Homes priced
at/above $750,000 comprised 10.2% of sales, up from the year-earlier 10.0%.
* 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 January, single-unit completions climbed by 44,000 units (+4.4%). Sales also rose (45,000 units), resulting in inventory for sale shrinking in both absolute (-13,000 units) and months-of-inventory (-0.8 month) terms.
Existing home sales retreated for a twelfth month in January (-0.7% or 30,000 units) to a SAAR of 4.00 million units (4.10 million expected). Inventory of existing homes for sale expanded in absolute terms (+20,000 units) but was unchanged in months-of-inventory terms. Because resales retreated while new-home sales rose, the share of total sales comprised of new homes increased to 14.3%. The median price of previously owned homes sold in January dropped to $359,000 (-2.0% or $7,500).
Housing affordability bumped higher (+6.9 index points) as the median price
of existing homes for sale in December fell by $6,000 (-1.6% MoM; +2.0 YoY) to $372,700.
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 -0.8% (+5.8% YoY).
“The
cooling in home prices that began in June 2022 continued through year end, as
December marked the sixth consecutive month of declines for our National
Composite Index,” said Craig
Lazzara, Managing Director at S&P DJI. “The National Composite declined
by -0.8% in December, and now stands 4.4% below its June peak. For 2022 as a
whole, the National Composite rose by 5.8%, the 15th best performance in our
35-year history, although obviously well below 2021’s record-setting 18.9%
gain. We could record similar observations in the 10- and 20-City Composites.
“Prices
fell in all 20 cities in December, with a median decline of -1.1%. Moreover,
for all 20 cities, year-over-year gains in December (median 4.4%) were lower
than those of November (median 6.4%). We noted last month that home prices in
San Francisco had fallen on a year-over-year basis. San Francisco’s decline
worsened in December (-4.2% year-over-year); its west coast neighbors Seattle
(- 1.8%) and Portland (+1.1%) once again form the bottom of the league table.
“As
was the case last month, December’s best performers were all in the Southeast,
with Miami (+15.9%) in the lead for the fifth straight month. Tampa (+13.9%)
and Atlanta (+10.4%) continued in second and third place, with Charlotte
(+9.9%) not far behind. Unsurprisingly, the Southeast (+12.5%) and South
(+11.6%) were the strongest regions, and the West (+1.2%) continuing as the
weakest.
“The prospect of stable, or higher, interest rates means that mortgage financing remains a headwind for home prices, while economic weakness, including the possibility of a recession, may 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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