New Home Sales Bounce Up to 14-Year High in July
posted by Michael Lewis on August 25, 2020 - 1:57pm
Another day, another upside surprise in housing. Sales of new single-family homes soared nearly +14% in July to 901K units (seasonally-adjusted at annual rate).
This was the highest level since the bubble days in 2007 and well above the consensus’ 780K estimate. Regional results varied widely, from a -23% sales drop in the Northeast to a +59% surge in the Midwest. The South and West posted moderate gains. No doubt early summer results have benefited from catch-up for the soft sales during spring, when the nation was “shut down.” Still, the sales trend is rising. As housing starts also continue to recover, bringing greater selection, new home sales will pick up further. There were just 299K homes for sale at the end of July, down -9% from July 2019 and historically low.
At the July pace, there was a 4.0-month supply of homes for sale. Realtors call less than six-months supply a “sellers’ market” with rising prices. Median new home prices last month were up +7% from a year ago, though this can be distorted by mix issues. Case-Shiller and other metrics indicate a +4-5% price trend. For a full detailed report, please visit www.freemarketinc.com.