Sales of new
single-family houses in March 2023 were at a seasonally adjusted annual rate
(SAAR) of 683,000 units (634,000 expected).
This is 9.6 percent (±15.2 percent)* above the revised February rate of 623,000
(originally 640,000 units), but 3.4 percent (±12.7 percent)* below the March
2022 SAAR of 707,000 units; the not-seasonally adjusted (NSA) year-over-year
comparison (shown in the table above) was -2.9%. For longer-term perspectives,
NSA sales were 50.8% below the “housing bubble” peak and 26.2% above the
long-term, pre-2000 average.
The
median sales price of new houses sold in March 2023 was $449,800 (+3.8%, or $16,600).
The average sales price was $562,400 (+12.1%, or $60,600). Homes priced
at/above $750,000 comprised 12.1% of sales, up from the year-earlier 11.8%.
* 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 March, single-unit completions climbed by 25,000 units (+2.4%). Sales also rose (60,000 units, or +9.6%), resulting in inventory for sale shrinking in both absolute (-2,000 units) and months-of-inventory (-0.4 month) terms.
Existing home sales resumed their decline when sliding (-2.4% or 110,000 units) in March to a SAAR of 4.44 million units (4.5 million expected). Inventory of existing homes for sale expanded in absolute terms (+10,000 units) but was unchanged in months-of-inventory terms. Because resales retreated while new-home sales advanced, the share of total sales comprised of new homes increased to 13.3%. The median price of previously owned homes sold in March rose to $375,700 (+3.3% or $12,100).
Housing affordability slipped (-0.3 index point) as the median price of
existing homes for sale in February rose by $2,100 (+0.6% MoM; -0.7 YoY) to $367,500.
Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller
CoreLogic Home Price indices poked higher at a not-seasonally adjusted monthly change
of +0.2% (+2.0% YoY).
“Home
price trends moderated in February 2023,” said Craig
Lazzara, Managing Director at S&P DJI. “The National Composite, which
had declined for seven consecutive months, rose a modest 0.2% in February, and
now stands 4.9% below its June 2022 peak. Our 10- and 20-City Composites
performed similarly, with February gains of 0.3% and 0.2%; these Composites are
currently 6.0% and 6.6% below their respective peaks. On a trailing 12-month
basis, the National Composite is only 2.0% above its level in February 2022;
the 10- and 20-City Composites are both up 0.4% on a year-over-year basis.
“The
moderation we observed nationally is also apparent at a more granular level.
Before seasonal adjustment, prices rose in 12 cities in February (versus in
only one in January). Seasonally adjusted data showed nine cities with rising
prices in February (versus five in January). With or without seasonal
adjustment, most cities’ February results showed improvement relative to their
January counterparts.
“February’s
results were most interesting because of their stark regional differences.
Miami’s 10.8% year-over-year gain made it the best-performing city for the
seventh consecutive month. Tampa (+7.7%) and Atlanta (+6.6%) continued in
second and third place, with Charlotte (+6.0%) close behind. Results were
different in the Pacific and Mountain time zones. Last month, four West Coast
cities (San Francisco, Seattle, San Diego, and Portland) were in negative
year-over-year territory. In February they were joined by four of their western
neighbors, as Las Vegas (-2.6%), Phoenix (-2.1%), Los Angeles (-1.3%), and
Denver (-1.2%) all tipped into negative territory. It’s unsurprising that the
Southeast (+7.8%) remains the country’s strongest region, while the West
(-4.2%) continues as the weakest.
“The results released today pre-date the disruptions in the commercial banking industry which began in early March. Although forecasts are mixed, so far the Federal Reserve seems focused on its inflation-reduction targets, which suggests that interest rates may remain elevated, at least in the near-term. Mortgage financing and the prospect of economic weakness are therefore likely to remain a headwind for housing prices for at least the next several months.”
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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