Best June New Home Sales Data Since 2007
If you watch the news you would have a better chance of hearing about new home sales in Russia than in the United States because its is everything Russia all the time. Russian Dressing. Black Russians. White Russians. Russia House. The data that was released yesterday came within the range of expectations projected in the Residential Sales Forecast Article. Units sold were up June 2017 vs June 2016. It was thought that the number of units could drop 1% from May to June. The actual number was 3.5% - a slight dip from 57,000 units sold to 55,000 units sold. There was good news in the report.
Record Average Sales Price for Month of June. We saw a significant dip in the average sales price during the Housing Recession. We have seen some ups and downs since then in sales price. The trend is higher. The number of units sold are higher than they have been since June 2007, for the month of June. This levels is still lower than June 1982 and June 1993. The other way to look at it is that we saw nearly twice as many sales this June as compared to June 2010. Housing Inflation is real, as has been detailed numerous times in articles concerning the Consumer Price Index, most recently this month.
The Rolling Year Data is 593,000 Units.
Current Year Trend is for Over 600,000 Units to be sold - This means that things are improving. The official report projects a value of 610,000 units.Right now we are seeing new home sales trending between the number of units sold during 1983 and 1992. Split the difference and we should sell 615,000 units this year. When the Current year data is higher than the rolling year data there is strength in the market
The Revisions to last month's data were almost all to the downside. This just meansthat they overestimated what they thought the final numbers were going to be. The Average Sales Price was revised down for May from over $406,000 to $381,400. The annual rate of sales was revised down from 610,000 to 605,000 units, only to edge back up to 610,000 again this month. The Median Sales Price was revised from just under $350,000 to just under $325,000. The New Units for sale inventory edged higher with the revisions. This is not a surprise due to the level of units under construction exceeds 1 million units.
The overall message is that demand is returning for new homes. Supply is constrained in the existing home market so some people may be opting for new construction homes. Normally when someone moves up they move up by 50%, so someone buying a $300,000 new home is moving up from one that may sell for $200,000. Could this free up some existing home inventory before the end of the year? Will we eclipse 60,000 units sold during the month of July? Time will tell.
It's the economy.
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