October New Home Sales

Statistics on new home sales became a victim of the government shut down. The report, put out by the Census Bureau, delayed September’s information until the moment October’s data was released. September’s numbers were dismal, so the delay may have been for constructive since there was no time to dwell on the sour tally.

October’s pace jumped to 444,000 units on a seasonally adjusted annualized basis. This compares to September’s count of 354,000. The 90,000 unit increase makes October the best month since June. Year-over-year, the pace has improved by 21.6 percent. Year-to-date, the number of new homes sold is 15.8 percent higher than at the same time last year. Prices may have helped sales as the median home price fell in both months. The middle priced home was $257,400 and $245,800 in September and October respectively, falling from August’s revised tally of $258,600.

Supply changed dramatically over the two months. September had a supply of 6.4 months, following August’s inventory of 5.6 months. October dropped considerably to 4.9 months because of the increase in the pace of sales for the month. The estimate of actual homes for sale jumped 14,000 in September to 193,000 and fell to 187,000 in October.

Some of the movements in this report seem rather large. Atlas would like to see additional information in the months ahead before suggesting the number of transactions in this market are improving as rapidly as the latest tally might lead one to believe. The housing market is important for many reasons, jobs being one of them. If inventories are growing and the number of sales is doing the same, it should translate into job gains in one of the hardest hit portions of the labor market. Future reports from the Census Bureau should help shed some light on this matter. (by C. Cox)