Dennis Norman
This morning the U.S. Department of Commerce released a report showing the sale of New Homes in June were at a seasonally adjusted annual rate of 384,000, an 11% increase from May. The year over year decline lessened, June’s numbers are down 21.3% from a year ago which is a substantial improvement over May’s decline of 33% from the year prior.
Median prices for new homes decreased from $221,600 in May to $206,200 for June. Homes in the $150,000 – $299,999 range continue to dominate sales with 56% of the sales for June falling in this price range.
Perhaps the best news in the report is on the inventory of new homes. Inventory declined again to 281,000 homes which represents an 8.8 month supply based upon current sales rate. This is the lowest inventory we have seen in a long time and is a very positive sign to me. Read more…
Dennis Norman
By: Dennis Norman
This morning the U.S. Department of Commerce released a report showing the sale of New Homes in May were at a seasonally adjusted annual rate of 342,000. this represents a 0.6% drop from Aprils rate of 344,000 and is almost 33% down from a year ago.
Three of the four regions in the US actually saw an increase in new home sales for the month. The Northeast region was up 28.6% followed by the Midwest and the the West with increases of 18.6% and 1.3% respectively. The South saw a 8.5% drop in sales for the month.
Median prices for new homes increased to $221,600 from $212,600 in April. Homes in the $200,000 – $299,999 range continue to dominate sales with 28% of the sales, homes in the $150,000 – $199,999 range accounted for 25% of the sales for the month.
The inventory of new homes continued it’s decline down to 292,000 homes in May which represents a 10.2 month supply. A 10.2 month supply is still about twice as high as we would like to see but it is certainly headed the right direction. The Northeast region has the largest inventory of new homes with a 14.66 month supply, followed by the Midwest with a 11.29 month supply, the West at 9.75 months and the South at 9.3 months.
These figures are once again consistent with my earlier comments that I think the market is leveling off and perhaps is close to finding it’s bottom. As new home inventories continue to decline we should see more strength in sales numbers.
By: Dennis Norman
This morning the US Census Bureau and US Department of Housing and Urban Development (HUD) issued a their report on New Residential Construction for May 2009 showing a slight increase in new home construction activity.
The report shows the following:
- Building permits issued for single-family residences in May were at an annual rate of 408,000 which is a 7.9% increase over April, but still 35.1% below the rate a year ago.
- The Midwest region had the largest one month increase at 16.1%, followed by the Northeast at 13.5% the west at 7.5% and finally the South at 6.5%.
- Housing starts for single-family residences in May were at an annual rate of 401,000 which is a 7.5% increase over April but is 40.9% below last year.
- The South had the largest one month increase in starts at 10.6%, followed by the Midwest at 9.4%, the West at 8.6% and the Northeast actually had a decline of 12.5%
- Single-family homes completed in May were at a rate of 491,000 which is a drop of 9.4% from April and 42.4% down from a year ago.
- The Midwest region had the smallest monthly decline in completions with a drop of 2.3% followed by the South with a decline of 8.2%, the Northeast with a decline of 11.1% and the West with a 17% decline.
I think overall the numbers look good showing a very modest amount of increased construction activity. However, some of these statistics have high margins of error (for example housing completions is + or – 7.1% and housing starts are + or – 6.0%) we need to see several months of consistent data for the numbers to really mean anything in terms of the market.
Dennis Norman
By: Dennis Norman
Today the U.S. Census Bureau released it’s construction spending report for March, 2009 showing that spending on private, residential construction was at a seasonally-adjusted annual rate of $258.4 billion. This is down 4.2% from February and down 34% from a year ago.
In light of what is going on in the housing market and the sluggish sales rate of new homes, this is not surprising news. And, as I have said before, while this is bad news for all the thousands of people that are out of work as a result of the lack of construction spending, this is what we need to help get the market back on track. We still have a surplus of homes for sale out there and sitting vacant so we don’t need to increase the inventory at this point.
For home buyers I think this shows that the industry is reacting smartly and letting inventories decrease. This means that while most builders are free upgrades, discounted prices and other incentives to move out inventory, this is not going to last forever. We will reach the point where the inventory is back to a manageable level and many of the incentives will go away.
By: Dennis Norman
This morning the U.S. Department of Commerce released a report showing the sale of New Homes in March decreased 0.6 percent from February and is 30.6% less than a year ago.
A decline of less than 1%, following last February’s increase of 4.7% in sales I think again shows the market is perhaps leveling off. In addition, the change in year over year sales from last year has decreased from 41.1% less from February 2008 to February 2009 to 30.6% less from March 2008 to March 2009. Read more…
By: Dennis Norman
Today the U.S. Department of Commerce reported new home starts for March were down 10.8% from February and down 48.4% from a year ago.
This is a sharp contrast to last months numbers which showed a 22% increase over January. However, like I said in my post last month, I don’t think the increase was necessarily good news with regard to the real estate market as inventories are still high and sales are still sluggish…it’s not time to ramp up the building yet.
By: Dennis Norman
This morning the U.S. Department of Commerce released a report showing the sale of New Homes in February increased 4.7% over January sales but was still 41.1% less than a year ago.
It will take a lot more than this to conclude that we have “hit bottom” yet in the new home market but I think this is a positive sign and could be indicative of things to come.
The other positive news in this report was that the inventory of new homes continues to drop. Inventory was down to 330,000 new homes for sale at Read more…
By: Dennis Norman
Today the U.S. Department of Commerce reported new home starts for February were up over 22% from January although still over 47% down from a year ago.
This increase was unexpected and judging by the many news stories and blog posts I have seen today is apparently being viewed as good news. I don’t want to be a naysayer nor be pessimistic, but I don’t know that it is time to throw the party yet. Read more…
By: Dennis Norman
This morning the U.S. Department of Commerce released a report showing the sale of New Homes in January was down 10.2% from December and down over 48% from a year ago.
There is some good news in this report…consistent with the last few months, the number of new homes available for sale Read more…
By: Dennis Norman
Gerry Loesch, PE
In parts one, two, three and four of this series I gave you some background on Gerry Loesch as well as his informative E-View TM . .
Now we’ll finish with the final post of his E-View TM : Read more…
