New home sales were more robust than expected in September, data out Tuesday showed.
Sales of new, single-family homes ran at a seasonally adjusted annual rate of 800,000 last month (figure below), significantly quicker than the 756,000 rate consensus expected and above the highest estimate from 59 economists. The range was 710,000 to 787,000.
The 14% increase was the largest since July of 2020.
The figures came on the heels of ambiguous housing starts data and a solid read on existing home sales.
Try as I may, it’s impossible to avoid recycling the boilerplate commentary on the way to concluding that… well, that it’s difficult to draw conclusions. The following two paragraphs are verbatim from last week’s coverage.
The pandemic triggered a flight to the suburbs and record-low mortgage rates were fuel on the fire. Voracious demand ran up against supply constraints, prices soared and the Fed took some of the blame for putting homeownership further out of reach for many renters.
So, here we are, 18 months (give or take) later staring at an extremely convoluted conjuncture. We can list the relevant factors, but that’s not the same as determining which ones mattered most in any given month, let alone predicting which will abate, which will persist and, perhaps most importantly, the extent to which market forces will sort this out for us.
Prices remain extremely elevated. The median new home price jumped 18.7% YoY in September to almost $409,000 (figure below). The average selling price was almost $452,000.
It’s remarkable that the median price now exceeds $400,000. Months’ supply fell to 5.7, the lowest since May.
Meanwhile, the S&P CoreLogic Case-Shiller 20-City Index rose 19.7% YoY in August, according to separate data out Tuesday.
That was slightly less than expected, but the national index posted another “since 1988” record rise, jumping 19.84% (figure below).
One more tick and I’ll be forced to recalibrate the y-axis.
The monthly gain cooled a bit. The MoM rise on the national gauge was 1.43%, down from 1.59%.
“The US housing market showed continuing strength in August,” Craig Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P, remarked on Tuesday. “Every one of our city and composite indices stands at its all-time high.”
The latest release came with a caveat, though. “August data also suggest that the growth in housing prices, while still very strong, may be beginning to decelerate,” Lazzara said.