September New Home Sales

Sales of new homes hit a recovery high in September according to the Census Bureau.  Transactions totaled 467,000 on an annualized seasonally adjusted basis to end the third quarter.   This beats the prior period by 1,000 units after August’s tally was revised significantly lower to 466,000 from 504,000 in the initial estimate.  Transaction levels have not been this high since July 2008 when the nation was still in recession.

Prices may have helped boost the number of sales in September.  Both price measures (average and median) fell substantially during the month.  On average, a new home cost $313,200 in the period, a drop of $36,100 or 10.3 percent.  The median home price fell $27,800 or 9.7 percent to $259,000.  In just one month, the average and median price measures gave back all of their post August 2013 gains.

New home inventory is reasonably ample.  On a seasonally adjusted basis, there are currently 207,000 units for sale in various stages of completion.  At the currents pace of sales, this stock of homes will last 5.3 months.

As a gauge of economic health, the new housing market is inconclusive lately.  New housing sales reached a recovery high but needed some hefty price concessions to achieve the mark.  Housing starts, something Atlas does not write about on a regular basis, have been noticeably choppy lately, gaining 6.3 percent in September after falling 12.8 percent in August, which followed July’s 21 percent surge after two consecutive months of declines in May and June.  The steady climb of permits from earlier in the recovery has been replaced by a period of home builder uncertainty.  This is not necessarily a silent canary, but Atlas is hearing fewer chirps from the new housing songbird recently.                (by C. Cox)