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June 2017 Headline New Home Sales Modestly Improves

By Kurt Osterberg · On July 26, 2017

Written by John Lounsbury and Steven Hansen

The headlines say new home sales modestly improved and at market expectations. Our analysis is showing a continuing deceleration of new home sales.

Analyst Opinion of New Home Sales

This month the backward revisions were moderately down, and the rolling averages significantly declined. Because of weather and other factors, the rolling averages are the way to view this series – and the rolling averages are at the lower levels seen since the beginning of 2016.

The sales prices were significantly down.

This data series is suffering from methodology issues which manifest as a significant backward revision – and this month the revisions were up. Home sales move in spurts and jumps – so this is why we view this series using a three month rolling average.

Econintersect analysis:

unadjusted sales growth accelerated 2.5 % month-over-month.

unadjusted year-over-year sales up 10.0 % year-over-year. Year-over-year growth rate this month was within the range of growth seen last 12 months.

three month unadjusted trend rate of growth decelerated 3.8 % month-over-month – is up 5.7 % year-over-year.

US Census Headlines:

seasonally adjusted sales up 0.8 % month-over-month

seasonally adjusted year-over-year sales up 9.1 %

market expected (from Bloomberg) seasonally adjusted annualized sales of 590 K to 630 K (consensus 612 K) versus the actual at 610 K.

The quantity of new single family homes for sale remains well below historical levels.

Seasonally Adjusted New Homes for Sale

The headlines of the data release:

Sales of new single-family houses in June 2017 were at a seasonally adjusted annual rate of 610,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.8 percent (±12.1 percent)* above the revised May rate of 605,000 and is 9.1 percent (±14.4 percent)* above the June 2016 estimate of 559,000.