The Census Bureau reports New Home Sales in July were at a seasonally adjusted annual rate (SAAR) of 708 thousand.
The previous three months were revised up, combined.
Sales of new single‐family houses in July 2021 were at a seasonally adjusted annual rate of 708,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.0 percent above the revised June rate of 701,000, but is 27.2 percent below the July 2020 estimate of 972,000.
emphasis added
Click on graph for larger image.
The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.
New home sales are now declining year-over-year since sales soared following the first few months of the pandemic.
The second graph shows New Home Months of Supply.
The months of supply increased in July to 6.2 months from 6.0 months in June.
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 July was 367,000. This represents a supply of 6.2 months at the current sales rate.”
On 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.
The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).
In July 2021 (red column), 63 thousand new homes were sold (NSA). Last year, 85 thousand homes were sold in July.
The all time high for July was 117 thousand in 2005, and the all time low for July was 26 thousand in 2010.
This was above expectations of 690 thousand sales SAAR, and sales in the three previous months were revised up, combined. I’ll have more later today.