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Sales of new
single-family houses in January 2020 were at a seasonally adjusted annual rate (SAAR)
of 764,000 units (708,000 expected).
This is 7.9% (±17.8%)* above the revised December rate of 708,000 (originally 694,000)
and 18.6% (±19.2%)* above the January 2019 SAAR of 644,000 units; the
not-seasonally adjusted (NSA) year-over-year comparison (shown in the table
above) was +16.3%. For longer-term perspectives, NSA sales were 45.0% below the
“housing bubble” peak and 9.0% below the long-term, pre-2000 average.
The
median sales price of new houses sold in January jumped ($24,100 or +7.4% MoM)
to a record $348,300; meanwhile, the average sales price increased to $402,300
($29,000 or +7.8%). Starter homes (defined here as those priced below $200,000)
comprised 8.8% of the total sold, up from the year-earlier 8.2%; prior to the
Great Recession starter homes represented as much as 61% of total new-home sales.
Homes priced below $150,000 made up 1.8% of those sold in January, down from 2.0%
a year earlier.
* 90% confidence interval includes zero.
The Census Bureau does not have sufficient statistical evidence to conclude
that the actual change is different from zero.
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As
mentioned in our post
about housing permits, starts and completions in January, single-unit
completions decreased by 32,000 units (-3.5%). Although sales rose (56,000
units; +7.9%) while completions fell, inventory for sale expanded in absolute terms
(+1,000 units) but contracted in months-of-inventory (-0.4 month) terms.
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Existing home sales
retreated in January (70,000 units or -1.3%), to a SAAR of 5.46 million units. Inventory
of existing homes for sale expanded in both absolute (+30,000 units) and months-of-inventory
(+0.1 month) terms. Because new-home sales rose while resales fell, the share
of total sales comprised of new homes advanced to 12.3%. The median price of
previously owned homes sold in January decreased to $266,300 ($8,200 or -3.0%
MoM).
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Housing
affordability deteriorated (+1.9 percentage points) as the median price of
existing homes for sale in December rose by $2,900 (+1.1%; +8.0 YoY), to $277,000.
Concurrently, Standard &
Poor’s reported that the U.S. National Index in the S&P Case-Shiller CoreLogic
Home Price indices inched up at a not-seasonally adjusted monthly change of +0.1%
(+3.8% YoY).
"The
U.S. housing market continued its trend of stable growth in December,” said Craig
Lazzara, Managing Director and Global Head of Index Investment Strategy at
S&P Dow Jones Indices. “December’s results bring the National Composite
Index to a 3.8% increase for calendar 2019. This marks eight consecutive years
of increasing housing prices (an increase which is echoed in our 10- and
20-City Composites). At the national level, home prices are 59% above the
trough reached in February 2012, and 15% above their pre-financial crisis peak.
Results for 2019 were broad-based, with gains in every city in our 20-City
Composite.
“At
a regional level, Phoenix retains the top spot for the seventh consecutive
month, with a gain of 6.5% for December. Charlotte and Tampa rose by 5.3% and
5.2% respectively, leading the Southeast region. The Southeast has led all
regions for the past year.
“As
was the case last month, after a long period of decelerating price increases,
the National, 10-City, and 20-City Composites all rose at a faster rate in
December than they had done in November; 12 of our 20 cities likewise saw
accelerating prices. It is, of course, too soon to say whether this marks an
end to the deceleration or is merely a pause in the longer-term trend.”
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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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