From Jill Mislinski: This morning’s release of the June New Home Sales from the Census Bureau came in at 631K, down 5.3% month-over-month from a revised 666K in May. The Investing.comforecast was for 669K.
Here is the opening from the report:
Sales of new single-family houses in June 2018 were at a seasonally adjusted annual rate of 631,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 5.3 percent (±17.1 percent)* below the revised May rate of 666,000, but is 2.4 percent (±24.0 percent)* above the June 2017 estimate of 616,000.
The median sales price of new houses sold in June 2018 was $302,100. The average sales price was $363,300. [Full Report]
For a longer-term perspective, here is a snapshot of the data series, which is produced in conjunction with the Department of Housing and Urban Development. The data since January 1963 is available in the St. Louis Fed’s FRED repository here. We’ve included a six-month moving average to highlight the trend in this highly volatile series.
Over this time frame, we see the steady rise in new home sales following the 1990 recession and the acceleration in sales during the real estate bubble that peaked in 2005.
The Population-Adjusted Reality
Now let’s examine the data with a simple population adjustment. The Census Bureau’s mid-month population estimates show a 74.4% increase in the US population since 1963. Here is a chart of new home sales as a percent of the population.
New single-family home sales are 6.8% above the 1963 start of this data series. The population-adjusted version is 38.8% below the first 1963 sales and at a level similar to the lows we saw during the double-dip recession in the early 1980s, a time when 30-year mortgage rates peaked at 18.63%. Today’s 30-year rate is about 4.5%.
For another perspective, here is a chart of the median new home sale prices back to 1963, inflation adjusted. The data source is also the Census Bureau and can be found on the press release and website above. For inflation adjustment, we use the CPI-U, which is the Consumer Price Index for All Urban Consumers. We’ve included a 6-month moving average for this extremely volatile metric to give us a clearer sense of the trend.
Here’s a zoomed in look since 2000.
For additional perspectives on residential real estate, here is the complete list of our monthly updates:
- S&P/Case-Shiller Home Price Index
- FHFA House Price Index
- NAHB Housing Market Index
- New Home Sales
- Existing Home Sales
- New Residential Housing Starts
- New Residential Building Permits
- Secular Trends in Permits and Starts
- Pending Home Sales
The iShares Dow Jones US Home Const. ETF (ITB) was unchanged in premarket trading Thursday. Year-to-date, ITB has declined -14.58%, versus a 6.85% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Advisor Perspectives.