US New Home Sales - Visual Analysis & Historical Data

New Home Sales are seen as an important indicator for the US economy. On the one hand the data reflects consumer confidence. If the consumer feels comfortable enough to make large purchases then it usually means that they feel comfortable about overall economic conditions. This optimism will usually filter through to boost consumer spending.

The number of New Home Sales also has a bearing on the health of the construction industry. Construction operations are expanded to meet increasing demand which in turn boosts the employment market by creating new jobs. Construction investment will also grow as builders buy raw materials.

The third knock on effect is the purchase of furniture and white goods to furnish new homes.

If you would like to view historical data for New Home Sales you can do so by clicking here or scrolling to the bottom of the page.

US New Home Sales

Monthly data for the annualized rate of New Home Sales

December 23 2008:	US Housing Makes Multi-Year Lows - New and Existing Home Sales Plummet
November 26th 2008:	New Home Sales fall in October - Number of Homes for Sale at 4-Year Low
October 08 Update:	Post-release: US New Home Sales September 08: Prices Continue to Fall, Sales Slightly Higher
September 08 Update:	Post-release: US New Home Sales Lowest Since 1991 - Prices Hit 4-Year Low
July 08 Update:	Post-release: Reaction to US New Home Sales was mixed as sales fell to 530K, but not as much as had been expected. Economists had been expecting a slump to 504K but this failed to materialise. Data from May was boosted by an upward revision to 533K from 512K. The median price of a new home came in at $230 900, up from the previous month’s $227 700 but down YoY by 2.0%. At the current sales rate it would take 10 months exactly to deplete inventories of New Homes, better than last month’s 10.4 months. However, the number of New Homes actually for sale fell once again to 426K, down 21.5% from the same period last year. This number highlights the contraction in the home construction industry.
June 08 Update:	Post-release: New Home Sales fell once more in May by 2.5% MoM to 512K units (seasonally adjusted). This means that the current supply of new homes currently stands at 10.9 months, up from 10.7 in April. The fact that supply has increased once more even though the median price fell by 5.7% YoY would suggest that there is further downside potential to the new home sales market. Prices will continue to fall until they reach a level that stimulates demand significantly to reduce inventories.
May 08 Update:	Post-release: US New Home Sales increase MoM in April but have not lifted above a level last seen in the 1991 recession. This is because last month’s sales were revised down to 509K annualized. The figure for April represents a 3.3% MoM increase from the revised 509K in March. The data hasn’t been this low since April 1991.
April 08 Update:	Post-release: New Home Sales fell a further 8.5% in March from a revised 575K is February. The March number of 526K represents the lowest level since October 1991. The 526K is much lower than the 580K consensus estimate highlighting the fragility of the US Housing Market. Taking into consideration the downward revision of -15K, between Jan and Feb sales dropped 5.3%. This is much worse than the 1.8% originally thought. Fundamentally speaking a drop in New Home Sales is not unexpected. Consumers are worried that inflation in food and energy prices (amongst others) is eating up their disposable income. This makes big value purchases much less likely. There is also the imbalance between interest rates (currently falling) and mortgage rates that have been inflated by the credit crunch. This makes home finance much less affordable. The US economy is still shedding jobs and consumers are unwilling to purchase a new home while house prices continue to deflate. The prospect of negative equity has been enough to keep potential buyers on the sidelines and today’s data would suggest that we are some way off a recovery in sentiment, let alone home sales. Pre-release: New Home Sales are expected to extend their decline when figures for March are released, albeit at a slower pace than several months ago. New Homes are expected to fall 1.7% to 580K from last months’ 590K. Market expectations aren’t great considering the fall seen in Existing Home Sales to a seasonally adjusted 4.93M released earlier in the week. With a lack of improvement in lending conditions there are no predictions for a housing market turn around as yet.
Mar 08 Update:	Post-release: New Home Sales for Feb were higher than expected, but still drop to a 13-year low. The 1.8% drop to 590K is the lowest figure seen since 1995. There was also a revision to the January number; to 601K from the 588 thousand previously reported. Today’s poor data added to the fears that a tight credit market, rampant energy prices and worrying signs in the labor market could see the US into a “full-blown” recession. At the very least economists expect the down turn in the housing sector to last into 2009. Pre-release: Traders will be keen to see if New Home Sales can follow hot on the heels of the Existing Home Sales released earlier in the week and score an unexpected increase. Existing Home Sales posted a gain of 5.03M in February from 4.89M seen in January while consensus estimates puts New Home Sales at an expected 578K for Feb, down from 588K in Jan. If the housing numbers do surprise to the upside for a second time this week no body is calling the bottom in the housing market just yet. With consumer confidence falling to 64.5 (the lowest level since Richard Nixon was President) it seems unlikely that the consumer will venture on a house-buying spree.
Feb 08 Update:	Post-release: The Dollar continued to soften after worse than expected New Home Sales data. The figure came out a 588K vs 605K revised for the previous month. The market had expected 600K. As we mentioned in our pre-release comments: consumer confidence isn’t high enough to spur on the housing market, even with lower mortgage rates. This news illustrates the difficult conditions faced by homebuilders. With decreasing demand and increasing supply comes falling prices. This slashes profit margins and may prompt further downsizing that will filter its way into the job market. The labour market is another key economic indicator. Initial Jobless Claims will be watched closely tomorrow along with Bernanke’s testimony before the Senate Committee on Banking, Housing and Urban Affairs. Pre-release: This month US New Home Sales are expected to flatten somewhat at 600k compared to last month’s 604k. However analysts don’t foresee an end to the decline in New Home Sales in the short-term. Inventories are still too high and prices will need to fall further before the market can expect to see an increase in demand. As yesterday’s US Consumer Confidence showed, the US consumer isn’t feeling very bullish about economic prospects (the reading fell to its lowest level since 2003). Therefore you would expect a decline in significant purchases such as homes. As house prices fall (a subject well documented and dramatized in the media) most buyers are content to sit on the sidelines and wait to see the full effects of the credit-crunch. New Home Sales are likely to be keenly watched. If there is a significant shortfall in New Home Sales we could see a sharp spike in Dollar shorting. At this point the market is continuing to price in another 0.50% interest rate cut from the Fed at the next FOMC meeting.

US New Home Sales Historical Data

2008

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Forecast

600K

578K

580K

522K

515K

504K

530K

510K

452K

445K

417K

395K

Actual

597K

572K

513K

542K

515K

499K

505K

448K

434K

406K
(-27K)

388K
(-19K)

331K

2007

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Forecast

1090K

990K

890K

860K

922K

900K

826K

825K

770K

750K

718K

645K

Actual

880K

840K

844K

930K

857K

793K

796K

702K

694K

723K

629K

600K

Revised Higher - Revised Lower

* Please note that the date relates to the reporting period, not the release date. i.e. Data released in January is reporting the annualized rate of New Home Sales for the month of December, data released in February is the January number and so on. Therefore data will always appear to be one month ‘behind’.

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