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New Home Sales: Slower December As Hurricane Bounce Recedes

January 25, 2018

Bottom Line: As we saw with existing home sales and housing starts in December, sales of new homes slowed in December after the sharp bounce following the hurricanes. Sales over the last three months of 2017 averaged 638K and were 4.1% above the 6 month average of 613K. Additionally, prices continued to rise amid modest supply growth. Total sales for 2017 averaged 612k units per month compared to 561k in 2016 and 503k in 2015.

New Home Sales FELL by 9.3% to 625k, after the prior month was revised lower to 689k. This compared with market expectations for a decline to 675k, from the unrevised November level of 733k.

Sales are now 14.1% ABOVE their year ago level, -- but they are still 55.0% BELOW their July 2005 peak.

The Inventory of Homes Available for Sale ROSE by 3.9% to 295k. Inventories are now 15.2% ABOVE their year ago level but still 48.4% BELOW their July 2006 peak level.

Combined with the decline in sales, the Months' Supply increased to 5.7 months from 4.9 months. This is modestly BELOW a normal level of 6.0 months and well BELOW its peak of 12.2 in January 2009.

Home Prices ROSE with median prices 2.6% ABOVE their year ago level and with average prices 4.3% ABOVE their year ago level.

Article by Contingent Macro Advisors