New homes sales declined 9.4 percent from June to 571,000 units at a seasonally adjusted annual rate (SAAR), according to the U.S. Census Bureau. The number of new homes for sale increased 1.5 percent to 276,000 units (SAAR), its highest level since June 2009. Unlike last month when spec homes were a major driver, the July increase was driven by completed or under-construction new homes.
New homes sales fell more than expected in July, declining 9.4 percent from June to 571,000 units at a seasonally adjusted annual rate (SAAR), according to the U.S. Census Bureau. The decline put new home sales down 8.9 percent from last July, the first year-over-year decline in new home sales in 18 months and the largest year-over-year decline in new home sales in over three years.
The data should be read with some caution as month-to-month reports can be volatile, carry a wide statistical confidence interval, and are frequently revised in the subsequent months. New home sales for April, May and June were revised upward by a combined 46,000 units.
Regionally, the West saw the largest month-over-month declines in new homes sales; it’s also the only major region to report a year-over-year increase in sales. The booming West is growing in importance relative to nationwide new home construction: In July 2016, the West accounted for 23.8 percent of all new homes sold, a share that increased to 27.1 percent by July 2017.
The number of new homes for sale increased by 4,000 units (1.5 percent) to 276,000 units (SAAR), its highest level since June 2009 and up 16.5 percent from last July – the fastest annual pace of growth in the numbers of new homes on the market since April 2016. But inventory is still low by historic standards. Unlike last month,when spec homes were a major driver, the July increase was driven by completed or under-construction new homes. In the longer perspective, however, the share of new homes sold after construction has finished continues to hover near historic lows –a reflection of both strong demand, with buyers eager to claim any available inventory, but also the reluctance of some builders to carry construction risks and eager to offload the liability as quickly as possible.
The median seasonally adjusted price of new homes sold in July increased 2.7 percent from June to $320,100 and, though it was shy of the recent high of $326,100 reported in May, it is up 6.5 percent from last July. The pace of new home price growth has slowed in recent months: Looking at the centered 12-month moving average of year-over-year median sale prices, new home prices are now growing at an annual pace of around 1.4 percent compared to a pace of around 5.2 percent this time last year, and a pace of around 7 percent in July 2014. This primarily reflects the efforts of many builders to build more affordable homes, a market segment that is both attractive to more buyers and more difficult to address.
Related:
