New Home Sales Drop Slightly, Economists Expected A 3.4 Percent Rise -

New Home Sales Drop Slightly, Economists Expected A 3.4 Percent Rise

Jul 24, 2024Jeremy ParkinsonFinance0

New Home Sales from the Census Department chart by MishEconomists expected a bounce in new home sales from a 619,000 seasonally-adjusted annualized rate (SAAR) to 640,000. Instead, sales fell slightly to 617,000.New Residential ConstructionToday, the Census Department released the New Residential Construction report for June.

New Home Sales: Sales of new single-family houses in June 2024 were at a seasonally adjusted annual rate of 617,000. This is 0.6 percent (±14.6 percent) below the revised May rate of 621,000 and is 7.4 percent (±15.2 percent) below the June 2023 estimate of 666,000.

Sales Price: The median sales price of new houses sold in June 2024 was $417,300. The average sales price was $487,200.

For Sale Inventory and Months’ Supply: The seasonally adjusted estimate of new houses for sale at the end of June was 476,000. This represents a supply of 9.3 months at the current sales rate.

Note the margins of error in this report, ~15 percent.After three months of wild revisions, the revisions this month were negligible. Sales in May rose to 621,000 SAAR from the initially reported 619,000.
New Home Sales Since 1963 New home sales are well below the February 1964 report (yellow highlights).Who can afford homes? Prices are at record levels and mortgage rates are holding near 7.00 percent according to Mortgage News Daily.Mortgage rates are down to 6.87 percent today vs a high of 7,94 percent in October of 2023, but that has done little but prevent a further plunge.
Median and Average New Home Sales Price
Key Sales Price Points

The average sales price is $487,200 down from a high of $541,200 in July of 2022. That’s a decline of 10.0 percent,

The median sales price is $417,300 down from a high of $460,300 in October of 2022. That’s a decline of 9.3 percent.

What a person gets for those prices is questionable, but builders are doing all they can to make homes appear affordable.

The problem with median and average price is that it does not reflect what one is getting for the price.Prices are not adjusted for location, number of rooms, square footage, lot size, quality of construction, or amenities.The long-term picture is more interesting.Median and Average New Home Sales Price Since 1963Recession follows with a lag (yellow highlights) once median and average prices start dropping.The chart also shows the Fed’s bubble-blowing prowess. Home prices jump coming out of recessions as the Fed pours on liquidity.One cannot compare a 1963 home to much larger homes built today. But we can compare a home built today vs one built a few years back, pre-pandemic. You are certainly getting less for your money.Thank you Fed (Not)!Existing Home Sales Drop 5.4 Percent But Median Price Hits New RecordYesterday, I noted Existing Home Sales Drop 5.4 Percent But Median Price Hits New Record

Existing-home sales declined 5.4 percent in June. It was the 23rd decline in 29 months. But the median price hit a new record.

Not that anyone needed more evidence, but that’s another sign of Fed bubble-blowing prowess.Signs of Severe Credit Card and Auto Loan Stress in Generation ZThe people who most want to buy a house, can’t because they can neither afford a house nor the rent they are paying.That has been an explicit theme of mine since February.The economy is slowing and that will hit the zoomers first and the hardest, especially renters. This will have a huge election impact.I tie the economics and politics together in my post Signs of Severe Credit Card and Auto Loan Stress in Generation ZMore By This Author:Tesla Slammed 8 Percent After Hours, Musk Postpones Robotaxi AnnouncementExisting Home Sales Drop 5.4 Percent But Median Price Hits New RecordSigns Of Severe Credit Card And Auto Loan Stress In Generation Z