Sales of partially prefabricated wooden boxes adorned on at least one side with a handsome, albeit structurally irrelevant, brick veneer, slipped last month but nevertheless exceeded the collective wisdom of people who get paid to guesstimate such things.
That’s the fun version. The boilerplate copy goes as follows. Contract activity for new one-family houses in the US ran at a 652,000 annual rate in July, according to government data released Monday. That was down slightly versus June’s upwardly-revised pace, and easily ahead of the 630,000 consensus.
This series is famously volatile and subject to three months of historical revisions on every release, which is a polite way of saying it’s unreliable. And new home sales anyway represent just a fraction of the market.
As the figure reminds you, the headline’s stuck in a range that’s largely held since the 2023 spring buying season.
This isn’t the most exciting stuff in the world, but there was one point worth a mention: The median sale price, at “just” $403,800, was the lowest since November.
I should note that the same was true in June. In fact — and this underscores the notion that this dataset’s almost too volatile to matter — the median price was actually lower the prior month, or at least as initially reported. But, after Monday’s revisions, June’s median price stands at $407,200, which makes July’s median a “new” since-November low. The average price, at $487,300, was also the lowest in seven months.
Median prices have now fallen on a YoY basis for two months in a row, every month this year except for May and in the vast majority of months since early 2023.
That’s a direct reflection of builder concessions to a buyer pool which, despite the lowest mortgage rates since April, is still having a helluva time making the math work.
Recall that the NAHB’s gauge of builder sentiment’s loitering at very subdued levels, and incentive use is more prevalent than at any other time post-pandemic.
The number of new, completed homes for sale hit a fresh post-GFC record in July, Monday’s government data showed. Total supply, inclusive of under-construction new homes, fell slightly, but still sits at half a million.
There is one healthy indicator for housing. Location makes a difference so the correlation for prices is not 1 nationwide. I continue to post that nominal prices for housing likely will show very subdued price increases over the next 5 years and I believe they will lag nominal income growth. That combined with mortgage rates gradually falling will go a long way to curing unaffordability. But it won’t happen quickly.
1…2… Pulte’s coming for you. 3… 4… Gonna rig the Fed Board. 5…6… Putle trust fund is at risk
Echos of Country Joe and the Fish. “And it’s 1, 2, 3, what are we fightin’ for? Don’t ask me I don’t give a damn. Next stop is Vietnam. And it’s 5, 6, 7, open up the pearly gates. Well there ain’t no time to wonder why, whoopie! we’re all gonna die.”
Now what rhymes with “CECOT”…?
It was a play on the Nightmare on Elm Street nursery rhyme, but in honor for Country Joe & The Fish, 1… 2… “I like marijuana”
Missed it. I mean, I got the nursery rhyme that Freddie was… but yeah.
I actually saw Nightmare on Elm Street (on VHS, not in the theater), but it has been ~thirty years.
By the way, did you ever get your Creedence tapes back?
No, but they’ve got 4 detectives on it. They got ’em working in shifts!
Leads.