Written by John Lounsbury and Steven Hansen
The headlines say new home sales declined from last month. The rolling averages smooth out much of the uneven data produced in this series – and this month there was an improvement in the rolling averages.The data was revised downward in the previous months making the bad headlines even worse than first glance.
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As the data is noisy, the 3 month rolling average is the way to look at this data. This data series is suffering from methodology issues. Econintersect analysis:
- unadjusted sales growth accelerated 6.8 % month-over-month (after last month’s revised deceleration of 16.6%).
- unadjusted year-over-year sales up 18.4% (Last month was up 11.6%). Growth this month is on the high end of the range of growth seen last 12 months.
- three month unadjusted trend rate of growth accelerated 0.2% month-over-month – is up 19.2% year-over-year.
Unadjusted Year-over-Year Rate of Growth – Sales (blue line) and 3 month rolling average of Sales (red line)
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US Census Headlines:
- seasonally adjusted sales down 6.8% month-over-month
- seasonally adjusted year-over-year sales up 18.1%
- market expected (from Bloomberg) seasonally adjusted annualized sales of 535K to 570K (consensus 550K) versus the actual at 482.
The quantity of new single family homes for sale remains well below historical levels.
Seasonally Adjusted New Homes for Sale
As the sales data is noisy (large monthly variations).
Year-over-Year Change – Unadjusted New Home Sales Volumes (blue line) with zero growth line emphasized
The headlines of the data release:
Sales of new single-family houses in June 2015 were at a seasonally adjusted annual rate of 482,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.8 percent (±12.5%)* below the revised May rate of 517,000, but is 18.1 percent (±18.1%) above the June 2014 estimate of 408,000. The seasonally adjusted estimate of new houses for sale at the end of June was 215,000.
