Sales of new
single-family houses in April 2023 were at a seasonally adjusted annual rate (SAAR)
of 683,000 units (670,000 expected).
This is 4.1% (±11.8%)* above the revised March rate of 656,000 (originally
683,000 units) and 11.8% (±15.1%)* above the April 2022 SAAR of 611,000 units;
the not-seasonally adjusted (NSA) year-over-year comparison (shown in the table
above) was +10.7%. For longer-term perspectives, NSA sales were 50.8% below the
“housing bubble” peak and 18.6% above the long-term, pre-2000 average.
The
median sales price of new houses sold in April 2023 was $420,800 (-7.7%, or
$35,000). The average sales price was $501,000 (-10.4%, or $58,200). Homes
priced at/above $750,000 comprised 11.3% of sales, down from the year-earlier 14.3%.
* 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 April, single-unit completions fell by 68,000 units (-6.5%). Sales rose (27,000 units, or +4.1%), resulting in inventory for sale expanding in absolute terms (+1,000 units) but shrinking on months-of-inventory (-0.3 month) terms.
Existing home sales extended their decline when sliding (-3.4% or 150,000 units) in April to a SAAR of 4.28 million units (4.295 million expected). Inventory of existing homes for sale expanded in both absolute (+70,000 units) and months-of-inventory (+0.3 month) terms. Because resales retreated while new-home sales advanced, the share of total sales comprised of new homes increased to 13.8%. The median price of previously owned homes sold in April rose to $388,800 (+3.6% or $13,400).
Housing affordability slid (-5.2 index points) as the median price of
existing homes for sale in March rose by $11,900 (+3.2% MoM; -1.4 YoY) to $380,000.
Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller
CoreLogic Home Price indices accelerated to a not-seasonally adjusted monthly change
of +1.3% (+0.7% YoY).
“The
modest increases in home prices we saw a month ago accelerated in March 2023,”
said Craig
Lazzara, Managing Director at S&P DJI. “The National Composite rose by
1.3% in March, and now stands only 3.6% below its June 2022 peak. Our 10- and
20-City Composites performed similarly, with March gains of 1.6% and 1.5%
respectively. On a trailing 12-month basis, the National Composite is only 0.7%
above its level in March 2022, with the 10- and 20-City Composites modestly negative
on a year-over-year basis.
“The
acceleration we observed nationally was also apparent at a more granular level.
Before seasonal adjustment, prices rose in all 20 cities in March (versus in 12
in February), and in all 20 price gains accelerated between February and March.
Seasonally adjusted data showed 15 cities with rising prices in March (versus
11 in February), with acceleration in 14 cities.
“One
of the most interesting aspects of our report continues to lie in its stark
regional differences. Miami’s 7.7% year-over-year gain made it the
best-performing city for the eighth consecutive month. Tampa (+4.8%) continued
in second place, narrowly ahead of bronze medalist Charlotte (+4.7%). The
farther west we look, the weaker prices are, with Seattle (-12.4%) now leading
San Francisco (-11.2%) at the bottom of the league table. It’s unsurprising
that the Southeast (+5.4%) remains the country’s strongest region, while the
West (-6.2%) remains the weakest.
“Two months of increasing prices do not a definitive recovery make, but March’s results suggest that the decline in home prices that began in June 2022 may have come to an end. That said, the challenges posed by current mortgage rates and the continuing possibility of economic weakness are 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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