February 2016 New Home Sales Improve?


Written by John Lounsbury and Steven Hansen

The headlines say new home sales improved from last month – and is in contraction year-over-year. The rolling averages smooth out much of the uneven data produced in this series – and this month there was a significant decline in the rolling averages.

This data series is suffering from methodology issues. Econintersect analysis:

  • unadjusted sales growth decelerated 0.3 % month-over-month (after last month’s deceleration of 13.7 %).
  • unadjusted year-over-year sales down 2.2 % (Last month was down 2.5 %). Growth this month was well below average for the range of growth seen last 12 months.
  • three month unadjusted trend rate of growth decelerated 5.8 % month-over-month – is up 0.8 % year-over-year.
  • Unadjusted Year-over-Year Rate of Growth – Sales (blue line) and 3 month rolling average of Sales (red line)

    US Census Headlines:

  • seasonally adjusted sales up 2.0 % month-over-month
  • seasonally adjusted year-over-year sales down 6.1 %
  • market expected (from Bloomberg) seasonally adjusted annualized sales of 489 K to 530 K (consensus 510 K) versus the actual at 512 K.
  • The quantity of new single family homes for sale remains well below historical levels.

    Seasonally Adjusted New Homes for Sale

    As the sales data is noisy (large monthly variations).

    Year-over-Year Change – Unadjusted New Home Sales Volumes (blue line) with zero growth line emphasized

    The headlines of the data release:

    Sales of new single-family houses in February 2016 were at a seasonally adjusted annual rate of 512,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.0 percent (±18.8%)* above the revised January rate of 502,000, but is 6.1 percent (±17.9%)* below the February 2015 estimate of 545,000.

    Unadjusted New Home Sales Monthly Volumes In Thousands

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