Sales of new
single-family houses in January 2024 were at a seasonally adjusted annual rate (SAAR)
of 661,000 units (685,000 expected).
This is 1.5% (±19.9%)* above the revised December rate of 651,000 (originally
664,000 units) and 1.8% (±19.4%)* above the January 2023 SAAR of 649,000 units;
the not-seasonally adjusted (NSA) year-over-year comparison (shown in the table
above) was +3.6%. For longer-term perspectives, NSA sales were 52.4% below the
“housing bubble” peak and 9.0% above the long-term, pre-2000 average.
The
median sales price of new houses sold in January 2024 was $420,700 (+1.8% MoM,
or $7,600). The average sales price was $534,300 (+8.3%, or $40,900). Homes
priced at/above $750,000 comprised 14.0% of sales, up from the year-earlier 12.7%.
* 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 fell by 167,000 units (-16.3%). Sales advanced (10,000 units, or +1.5%), but inventory for sale expanded in absolute terms (+4,000 units) but remained constant in months-of-inventory terms.
Existing home sales rose (120,000 units or +3.1%) in January to a SAAR of 4.00 million units (3.97 million expected). The inventory of existing homes for sale expanded in absolute terms (+20,000 units) but shrank in months-of-inventory terms (-0.1 month). Because new sales advanced at a slower pace than resales, the share of total sales comprised of new homes decreased to 14.2%. The median price of previously owned homes sold in January dipped to $379,100 (-0.6% or $2,300).
Housing affordability jumped 7.7 percentage points as the median price of
existing homes for sale in December retreated by $5,200 (-1.3% MoM; +4.0% YoY)
to $387,000. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller
CoreLogic Home Price indices fell to a not-seasonally adjusted monthly change
of -0.4% (but +5.5% YoY).
“U.S.
home prices faced significant headwinds in the fourth quarter of 2023,” said Brian
Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones
Indices. “However, on a seasonally adjusted basis, the S&P Case-Shiller
Home Price Indices continued its streak of seven consecutive record highs in
2023. Ten of 20 markets beat prior records, with San Diego registering an 8.9%
gain and Las Vegas the fastest rising market in December, after accounting for
seasonal impacts.”
“2023
U.S. housing gains haven’t followed such a synchronous pattern since the COVID
housing boom. The term ‘a rising tide lifts all boats’ seems appropriate given
broad-based performance in the U.S. housing sector. All 20 markets reported
yearly gains for the first time this year, with four markets rising over 8%.
Portland eked out a positive annual gain after 11 months of declines.
Regionally, the Midwest and Northeast both experienced the greatest annual
appreciation with 6.7%.”
“Looking back at the year, 2023 appears to have exceeded average annual home price gains over the past 35 years. With trend growth at the national level of 4.7%, a 5.5% return demonstrates solid, steady growth. While we are not experiencing the double-digit gains seen in the previous two years, above-trend growth should be well received considering the rising costs of financing home mortgages. We previously suggested that the surge in home prices during the COVID pandemic could have accelerated home ownership temporarily. The past two years reflect consistent growth slightly above trend, suggesting a more secular shift in home ownership post pandemic. In the short term, meanwhile, we should be able to measure the impact of higher mortgage rates on home prices. Increased financing costs appeared to precipitate home price declines in the fourth quarter, as 15 markets saw lower values compared to September.”
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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