Jill Mislinski: This morning’s release of the February New Home Sales from the Census Bureau was at 512K, up 2% MoM. Revisions were made to the previous three months.
The Investing.com forecast was for 510K.
Here is the opening from the report:
Sales of new single-family houses in February 2016 were at a seasonally adjusted annual rate of 512,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.0 percent (±18.8%)* above the revised January rate of 502,000, but is 6.1 percent (±17.9%)* below the February 2015 estimate of 545,000. [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.
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 71.8% 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 about 13% below the 1963 start of this data series.
The population-adjusted version is 49.6% 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 above 18%. Today’s 30-year rate is around 4%.
This article is brought to you courtesy of Jill Mislinski from Advisor Perspectives.