The monthly report on New Home Sales was released yesterday. The data, as with all government data, has a seasonally adjusted (SA) and a non-seasonally adjusted (NSA) component. The data that is released over various reports . Each report revises some of the prior data. Trends can be observed from the data. The authors of the official report reference an annual rate of sales that is used to project where we may find ourselves within the next twelve months. That is not where we are.
Where are we? Where may we be heading?
Best sales data during past eight years is worse than 24 years ago. The rest of the media is telling you that this is the best data we have seen for new home sales during the past nine years. The problem is that they forget to mention that nine years ago our sales data was comparable to where we were during 1994. We had lost 13 years of improving new home sales. When we hit bottom during 2010 we we lower than we had been since 1975. We had lost 35 years of improvement. You can look look at he data as double the volume of 2010 or half the volume of 2005 and 2006.
The Average sales Price is Lower than November 2015, November 2016. The average sales price dropped to 354,700 for new homes during the month of November. Is this a function of oversupply? We appear to have a slight existing home sales inventory shortage. We also appear to havean oversupply of new homes.
Current Year Sales are trending better than 1980 and 1990, Slower than 1983 and 1992. So far we have seen 522,000 new homes sold during 2016. We will end better than we did during 1980 when we sold 545,000 units. The trend for this year indicates that we could finish this year with between 570,000 and 600,000 units. We were trending towards over 600,000 until recently. The official target for the next year is 592,000. The problem is that the sales were revised down from 47,000to 46,000. The sales for September were revised down from 45,000 to 44,000. We only saw 41,000 units sold during November.
We sold 38,000 units during December of last year. This was a good month, relatively speaking. We still were not back to 2007. We sold more units than during December 2008, 2009, and all the years up to 2015. We have seen 540,000 units sold during the past 12 months. The twelve month pace is increasing. The problem is that we are growing at a slower pace than we saw during 1983 or 1992. We are growing at a slower pace than we were while the market was crumbling during 2007.
Did we lose thirteen, twenty two, or more years of growth during the Housing Recession? It took us 22 years to go from where we were during 1983 to hit the peak new home sales of 2005.We hit rock bottom during 2011. The trend is improving. Will it continue?If we are trending for 592,000 units sold during the next twelve months we we still be growing slower than we were during 1983 and 1992. The housing market is improving. It is still fragile.
It's the economy
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