New home sales fall sharply to 511,000 annual rate in July

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by Risk calculated on 23/08/2022 10:09:00

The Census Bureau reports that new home sales in July were at a seasonally adjusted annual rate (SAAR) of 511,000.

The previous three months were revised slightly lower, combined.

Sales of new single-family homes in July 2022 hit a seasonally adjusted annual rate of 511,000, according to estimates released jointly today by the US Census Bureau and the Department of Housing and Urban Development. That’s 12.6% below the revised June rate of 585,000 and 29.6% below the July 2021 estimate of 726,000.
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Click on the graphic to enlarge the image.

The first chart shows new home sales versus recessions since 1963. The dotted line represents the current sales rate.

New home sales are now well below pre-pandemic levels.

The second graph shows months of supply of new homes.

New Home Sales, Months of SupplyMonths of supply increased in July to 10.9 months from 9.2 months in June.

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

This is well above the high end of the normal range (around 4-6 months supply is normal).

“The seasonally adjusted estimate of new homes for sale at the end of July was 464,000. This represents 10.9 months of supply at the current sales rate.”

New Home Sales, NSAThe last chart shows NSA sales (monthly sales, unadjusted annual rate).

In July 2022 (red column), 42,000 new homes were sold (NSA). Last year, 62,000 homes were sold in July.

The July all-time high was 117,000 in 2005, and the July all-time low was 26,000 in 2010.

This was well below expectations, and sales for the previous three months were revised down slightly, combined. I’ll have more later today.

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