Economists expected a surge in new home sales in June. They missed the mark badly.
New Home Sales Seasonally-Adjusted Annualized Rate (SAAR)
The plunge in new home sales continues according to the Census Bureau’s New Residential Sales Report.
- New Home Sales Sales of new single‐family houses in June 2021 were at a seasonally adjusted annual rate of 676,000.
- This is 6.6 percent below the revised May rate of 724,000 and is 19.4 percent below the June 2020 estimate of 839,000.
- The median sales price of new houses sold in June 2021 was $361,800. The average sales price was $428,700.
- The seasonally‐adjusted estimate of new houses for sale at the end of June was 353,000. This represents a supply of 6.3 months at the current sales rate.
This article was originally published by Mish Talk.
From a peak of 993,000 SAAR in January, sales have declined to a below trend 676,000 SAAR in June.
Badly Missed Estimates
The Econoday consensus is amusing.
- May Sales as Originally Reported: 769,000
- May Sales as Revised: 724,000
- Consensus June Sales: 800,000
- Actual June Sales: 676,000
Massive Distortions of Reality
Seasonal adjustments distort the numbers badly. Covid distorted the numbers further.
To understand how much all one has to do is look at unadjusted numbers.
The bullet points for each of the charts is for the same month.
For example, there were actually example 60,000 homes sold in June. This was reported as 676,000 homes sold.
NSA vs SAAR Bullet Points
- June 2021: 60,000 NSA = 676,000 SAAR
- January 2021: 77,000 NSA = 993,000 SAAR
- April 2020: 52,000 NSA = 321,000 SAAR
- January 2020: 59,000 NSA = 756,000 SAAR
So no, we did not sell nearly a million homes in January, it was 77,000 (and likely to be revised).
Covid of course massively distorted the numbers.
Buying got pushed into colder months and seasonal adjustments made a mess of reporting.
All these numbers are heavily revised every month. This month I noticed a revision all the way back to January of 2018, over 3 years ago.