Sales of new
single-family houses in September 2023 were at a seasonally adjusted annual
rate (SAAR) of 759,000 units (685,000 expected).
This is 12.3% (±16.6%)* above the revised August rate of 676,000 (originally
675,000 units) and 33.9% (±22.9%) above the September 2022 SAAR of 567,000
units; the not-seasonally adjusted (NSA) year-over-year comparison (shown in
the table above) was +36.4%. For longer-term perspectives, NSA sales were 45.4%
below the “housing bubble” peak but 14.8% above the long-term, pre-2000 average.
The
median sales price of new houses sold in September 2023 was $418,800 (-3.3%
MoM, or $14,300). The average sales price was $503,900 (-3.6%, or $18,800). Homes
priced at/above $750,000 comprised 11.7% of sales, down from the year-earlier
13.6%.
* 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 September, single-unit completions advanced by 50,000 units (+5.3%). Sales also rose (83,000 units, or +12.3%), resulting in inventory for sale expanding in absolute terms (+3,000 units) but months of inventory contracting (-0.8 month).
Existing home sales dipped (-2.0% or 80,000 units) in September to a SAAR of 3.96 million units (3.90 million expected). The inventory of existing homes for sale expanded in both absolute (+30,000 units) and months-of-inventory (+0.1 month) terms. Because resales retreated while new-home sales advanced, the share of total sales comprised of new homes increased to 16.1%. The median price of previously owned homes sold in September fell to $394,300 (-2.4% or $9,800).
Housing affordability fell -2.2 percentage points as the median price of
existing homes for sale in August rose by $2,300 (+0.6% MoM; +3.7% YoY) to $413,500.
Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller
CoreLogic Home Price indices decelerated to a not-seasonally adjusted monthly change
of +0.4% (+2.6% YoY).
“U.S.
home prices continued to rise in August 2023,” said Craig
Lazzara, Managing Director at S&P DJI. “Our National Composite rose by
0.4% in August, which marks the seventh consecutive monthly gain since prices
bottomed in January 2023. The Composite now stands 2.6% above its year-ago
level and 6.4% above its January level. Our 10- and 20-City Composites each
also rose in August, and likewise currently exceed their year-ago and January
levels.
“One
measure of the strength of the housing market is the relationship of current
prices to their historical levels. On that dimension, it’s worth noting that
the National Composite, the 10-City Composite, and seven individual cities
(Atlanta, Boston, Charlotte, Chicago, Detroit, Miami, and New York) stand at
their all-time highs. Observing the breadth of price changes provides insight
into another dimension of market health. On a seasonally adjusted basis, prices
increased in 19 of 20 cities in August (and Cleveland only missed by a
whisker); before seasonal adjustments, prices rose in 13 cities.
“Regional
differences are substantial. On a year-over-year basis, the three
best-performing metropolitan areas in August were Chicago (+5.00%), New York
(+4.98%), and Detroit (+4.8%). Chicago
has topped the leader board for four consecutive months, and New York moved up
this month to the silver medal position. The bottom of the rankings still has a
western focus, with the worst performances coming from Las Vegas (-4.9%) and
Phoenix (-3.9%). The Midwest (+3.9%)
continues as the nation’s strongest region, followed by the Northeast
(+3.8%). The West (-0.9%) and Southwest
(-0.8%) remain the weakest regions.
“On a year-to-date basis, the National Composite has risen 5.8%, which is well above the median full calendar year increase in more than 35 years of data. The year’s increase in mortgage rates has surely suppressed housing demand, but after years of very low rates, it seems to have suppressed supply even more. Unless higher rates or other events lead to general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results.”
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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