New Home Sales were essentially in line with expectations over the Aug/Sept timeframe as Sept was 4k better at 389k annualized while Aug was revised lower by 5k to 368k. At 389k, it’s the highest level since the tax credit boosted month in April ’10. While homes for sale rose by 2k to 145k, the offset from the increase in sales sent the months supply down to 4.5 from 4.7, the lowest since Oct ’05 and below the 20 yr average of 5.7. Sales rose in the Northeast, South and West. The median home price was $242,400, an increase of 11.7% y/o/y but down 3.2% sequentially. As I’ve said with previous housing data out over the past few weeks, there is no question we’ve seen improvement that hopefully is long lasting but we again must put these housing levels into full perspective. While New Home Sales are 42% off the lows seen in Feb ’11, they still remain 72% below the bubble highs and are just back to where they were at the trough of 1966, 1970, barely above the one seen in the recession of ’81/’82 and still below the bottom in the ’90/’91 recession. On one hand we of course have a long runway ahead for improvement but on the other hand all we’ve seen so far is a well deserved bounce off an historic crash with the pace of gains likely more in fits and starts rather than straight lines.
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