Nothing New in New Home Sales. Two Times!

The Census Bureau and Department of Housing and Urban Development have
released New
Residential Sales
data for May  2011.

New Residential Sales data provides statistics on the sales of new
privately-owned single-family residential structures in the United States. Data
included in the press release are (1) the number of new single-family houses
sold; (2) the number of new single-family houses for sale; and (3) the median
and average sales prices of new homes sold. New residential sales estimates only include new single-family residential
structures. Sales of multi-family units are excluded from these statistics.

Here is a Quick Recap from Reuters…

  • RTRS – US MAY SINGLE-FAMILY HOME SALES 319,000 UNIT ANN.
    RATE (CONS 310,000) VS APRIL 326,000 (PREV 323,000)
  • RTRS – US MAY SINGLE-FAMILY
    HOME SALES -2.1 PCT VS APRIL +6.5 PCT (PREV +7.3 PCT)
  • RTRS – US MAY HOME SALES
    NORTHEAST -26.7 PCT, MIDWEST UNCH, SOUTH +2.4 PCT, WEST -3.5 PCT RTRS
  • RTRS – US MAY
    NEW HOME SUPPLY 6.2 MONTHS’ WORTH AT CURRENT PACE VS APRIL 6.3 MONTHS RTRS
  • RTRS – US
    MAY MEDIAN SALE PRICE $222,600, -3.4 PCT FROM MAY 2010 ($230,500)
  • RTRS – US
    HOMES FOR SALE AT END OF MAY 166,000 UNITS, RECORD LOW, VS APRIL 172,000 UNITS

Sales of new single-family houses in May 2011 were at a seasonally
adjusted annual rate of 319,000, according to estimates released jointly
today by the U.S. Census Bureau and the Department of Housing and Urban
Development.

This is 2.1 percent (±10.7%)* below the revised April rate of
326,000, but is 13.5 percent (±13.6%)* above the May 2010 estimate of
281,000.

The median sales price of new houses sold in May 2011 was
$222,600; the average sales price was $266,400. The seasonally adjusted
estimate of new houses for sale at the end of May was 166,000. This
represents a supply of 6.2 months at the current sales rate.

Honestly I don’t know why we even cover this data anymore. It’s like we’re expecting to hear something different from the Commerce Department.

Do you see that blue histogram in the chart above? It estimates the amount of New Home Sales that will have occurred by the end of 2011 if sales continue at their current pace (Annualized). One thing you might notice about that histogram chart is its most recent additions look historically low in comparison to the housing boom of the mid-2000’s. While the current pace of annualized sales is indeed above the record low of 278,000 seen in August 2010, at 319,000 we’re not too far from the bottom! And we haven’t been since April 2010 either, when the annualized pace was 420,000 New Home Sales. Same story different month….

Here’s another fun fact if you’re not satisfied. The “(±10.7%)” and “(±13.6%)” seen in this part of the report: “This is 2.1 percent (±10.7%)* below the revised April rate of
326,000, but is 13.5 percent (±13.6%)* above the May 2010 estimate of
281,000”, represents the Standard Error of the survey results. When the Standard Error is bigger than the Commerce Department’s estimation, we would say the survey results are “Statistically Insignificant”. Meaning we don’t know if New Home Sales actually increased or decreased in May. The survey data is telling us NOTHING!  A BETTER EXPLANATION

So on two accounts we learned nothing new about the residential construction market today. Well wait, there was one thing…

RTRS – NEW
HOMES FOR SALE AT END OF MAY AT 166,000 UNITS. NEW RECORD LOW (PREVIOUS WAS APRIL 2011 AT 172,000 UNITS)

The new construction market has gone totally stagnate….


*A house is considered sold when either a sales contract has been signed or a
deposit accepted.   Included in our estimates are houses for which a
sales contract is signed or deposit accepted before construction has actually
started; for instance, houses sold from a model or from plans before any work
has started on the footings or foundations.  These estimates also include
houses sold while under construction or after completion.  This survey
does not follow through to the completion (“closing”) of the sales
transaction, so even if the transaction is not finalized, the house is still
considered sold. Preliminary new home sales figures are subject to revision due
to the survey methodology and definitions used. The survey is primarily based
on a sample of houses selected from building permits.

Article source: http://www.mortgagenewsdaily.com/06232011_new_home_sales.asp

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