No surprise here:
"New-home sales fell for the fourth time in six months during January, while
inventories climbed to another record.
Sales of single-family homes decreased 5.0% to a seasonally
adjusted annual rate of 1.233 million, the Commerce Department said Monday.
December new-home sales rose 3.8% to a seasonally adjusted annual rate of 1.298
million; originally, December sales were seen at 1.269 million. Sales dropped
7.0% in November, rose 7.7% in October, and sank 2.0% in September and 7.1% in
Analysts say the housing sector is cooling after years of
record-breaking demand. This view has held despite an earlier report showing
January home construction climbed to a 33-year high. The surge in housing starts
was attributed to weather — it was the warmest January on record in the U.S.,
with an average temperature of 39.5 degrees.
January new-home sales fell 10.8% in the Midwest, 14.9% in the
Northeast, and 10.3% in the South. Sales climbed 11.3% in the West."
There were an estimated 528,000 homes for sale at the end of
January, which was a record. That represented a 5.2 months’ supply at the
current sales rate, the highest pace since 5.2 in November 1996. In December, an
estimated 515,000 were for sale, a 4.8 months’ inventory. An estimated 93,000
homes were actually sold last month, up from 89,000 in December, based on
figures not seasonally adjusted."
The key takeaway to me is that Inventory to sales ratio is now at a 9-year high — 5.2 months while the number of units for sale at a new record. The Affordability Index shows homes are at 15-yr. low.
Calculated Risk has assembled numerous charts (pretty!) covering the subject; If you want to see more, that’s your next click.
courtesy of Calculated Risk
Sales of New Homes Fell By 5% During January
WSJ, February 27, 2006 10:09 a.m.
NEW RESIDENTIAL SALES IN JANUARY 2006
FEBRUARY 27, 2006 AT 10:00 A.M.
Manufacturing and Construction Division
Looking at that chart from Calculated Risk, it appears new home sales actually peaked in July . . .
Interesting to me that the Calculated Risk link takes you to, among others, a chart that shows on a monthly year-over-year basis new home sales are not only not declining, but have increased for 17 successive months.
it makes a whole lot more sense to present this data on a year over year basis in addition to a trend basis. that way you can see the seasonality and undetstand if we are accelerating or decelerating. check out this blog for a better idea.
Virtually every month for the past 3 years has been avoe the year before month. However, we ar starting to see smaller advances. I would not be surprised to see feb numbers UNDER last years numbers.