The August New Home Data projected the best August since 2007
New Construction was the Best Since 2007 - New Home Sales, Too.
There are three reports regarding the real estate industry that this column covers: The new home construction report, the new home sales report, and the existing home sales report. This year the new home starts had been slowing while the completions have been growing. Units under construction have been strengthening for years. New Home sales have been picking up pace. Existing Home sales are seeing inventory rise from record or new record lows, opening the opportunity for increased existing home sales.
New Home starts bottomed during 2011 and have been growing since that time. Units under construction have been rising since 2012. This has been the "year of completions. We have the most total new starts, year to date, since 2007. We have the most units under construction since 2007. We had our most completions for any month of the year since December 2007 this August.The new construction data feeds into the new home sales data.
New Home Inventory was expected to remain unchanged or grow slightly. The month to month growth indicates a value between 335,000 and 345,000 units. New Home sales have been knocking on the 50,000 unit level the past three years. The monthly growth rate, from July to August, is projecting a swing of plus or minus 7% or between 49,000 and 57,000. It was projected that we would set another August Average Sales Price Record. Shelter costs have been rising at over 3% a year every month this year. This means that we should see the new home sales price jump by at least 3%. This means that a $400,000 New Home Average Sales Price is a distinct possibility. All of this was covered in the article "August Real Estate Forecast: Building Momentum."
The Headline Number Average Sales Price exceeded $400,000. The Average Sales Price was recorded at $404,200, up from a revised July value of $372.700 and up from last August when it was $380,900. This also surpasses the all-time record average sales price of $402,900 that was recorded during December of 2017.
The Number of Units Sold spiked to 57,000 units. The most recent time we had August new home sales over 50,000 was August of 2007 when there were 60,000 units sold. This spike in August new home sales, coupled with the June spike in sales bolstered the "annualized" rate of sales to 713,000. The last time we finished a year with more than 700,000 units sold was 2007 when we had 776,000 units sold. The Current Year data stands at 473,000 units and is on track to solidly beat the sales data for 2008 through 2018. We are still trending with the data from 1988 (675,000) and 1989 (650,000) units. It is anticipated that we should end the year in the 660s.
The Inventory Level stayed virtually unchanged from last month at 328,000 units. We stood at 329,000 units during July of this this year and 322,000 units during August of 2018. Invisible inventory cannot be sold.
New Home Construction and New Home sales have synergistic impacts on the economy through increased retail sales and an increase in jobs. We are at our highest level of August Current Population Survey (CPS) full-time jobs and highest level of August Current Employment Statistics (CES) workers. We have a record level of August Wages. We are on pace for our second $6 trillion MARTS Retail Sales Year.
We are closing in on our best New Home Sales year since 2007. Will anybody else report this? If we have our best end of year data this December will that be reported? What's more important a strong economic report or a phone call conversation between President Trump and the President of the Ukraine?
It's the Economy.