May 2018 Headline New Home Sales Improve -

May 2018 Headline New Home Sales Improve

Jun 25, 2018Jeremy ParkinsonFinance0

Written by John Lounsbury and Steven Hansen

The headlines say new home sales improved. Our analysis shows improvement. Sales prices were little changed.

Analyst Opinion of New Home Sales

This month the backward revisions were downward. Because of weather and other factors, the rolling averages are the way to view this series – and the rolling averages remain average for the levels seen since the beginning of 2016..

This month was better than last month – and the rolling averages improved.

This data series is suffering from methodology issues which manifest as significant backward revision. Home sales move in spurts and jumps – so this is why we view this series using a three month rolling average.

Econintersect analysis:

unadjusted sales growth accelerated 3.3 % month-over-month.

unadjusted year-over-year sales 14.0 % year-over-year. Year-over-year growth rate this month was in the average range of growth seen last 12 months.

three month unadjusted trend rate of growth accelerated 2.6 % month-over-month – is up 10.3 % year-over-year.

US Census Headlines:

seasonally adjusted sales up 6.7 % month-over-month

seasonally adjusted year-over-year sales up 14.1 %

market expected (from Nasdaq / Econoday) seasonally adjusted annualized sales of 655 K to 700 K (consensus 665 K) versus the actual at 689 K.

The quantity of new single family homes for sale remains well below historical levels.

Seasonally Adjusted New Homes for Sale

The headlines of the data release:

Sales of new single-family houses in May 2018 were at a seasonally adjusted annual rate of 689,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.7 percent (±14.1 percent)* above the revised April rate of 646,000 and is 14.1 percent (±19.9 percent)* above the May 2017 estimate of 604,000.