New Home Sales Decrease to 676,000 Annual Rate in June

The Census Bureau reports New Home Sales in June were at a seasonally adjusted annual rate (SAAR) of 676 thousand.

The previous three months were revised down sharply.

Sales of new single‐family houses in June 2021 were at a seasonally adjusted annual rate of 676,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.6 percent below the revised May rate of 724,000 and is 19.4 percent below the June 2020 estimate of 839,000.
emphasis added

New Home SalesClick on graph for larger image.

The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

This is the start of likely year-over-year declines since sales soared following the first few months of the pandemic.

The second graph shows New Home Months of Supply.

New Home Sales, Months of SupplyThe months of supply increased in June to 6.3 months from 5.5 months in May.

The all time record high was 12.1 months of supply in January 2009. The all time record low was 3.5 months, most recently in October 2020.

This is above the normal range (about 4 to 6 months supply is normal).

“The seasonally‐adjusted estimate of new houses for sale at the end of June was 353,000. This represents a supply of 6.3 months at the current sales rate.”

New Home Sales, InventoryOn inventory, according to the Census Bureau:

“A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted.”

Starting in 1973 the Census Bureau broke this down into three categories: Not Started, Under Construction, and Completed.

The third graph shows the three categories of inventory starting in 1973.

The inventory of completed homes for sale is just above the record low, but the combined total of completed and under construction is close to normal.

New Home Sales, NSAThe last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).

In June 2021 (red column), 60 thousand new homes were sold (NSA). Last year, 79 thousand homes were sold in June.

The all time high for June was 115 thousand in 2005, and the all time low for June was 28 thousand in 2010 and in 2011.

This was well below expectations of 800 thousand sales SAAR, and sales in the three previous months were revised down significantly. I’ll have more later today.

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