- Gains in new home sales continue, but some of the large year-over-year jump was due to a low bar set in September 2015. That said, year-to-date new home sales also grew strongly at 13.1% year-over-year, which reflects healthy demand for new homes by otherwise inventory-constrained homebuyers.
- If we look past the monthly volatility by using the 12-month rolling total of new home sales, September was the best month since August 2008. By historical standards, however, new home sales per household are still about 36% below the long-run average.
- New homes comprised 11.8% of all home sales in September, increasing for the seventh straight month. As new construction continues its upward march, we should expect the share to continue to increase accordingly. While new home sales represented about 11.8% of all sales, it’s still less than half of the pre-recession average of 23.6%. Clearly, there is still much potential for new housing to relieve inventory-constrained buyers.
New home sales in August were at a seasonally adjusted rate of 593,000, which is up 29.8% year-over-year. It’s important to note, however, new home sales a year ago set a low bar as September 2015 was the lowest since November 2014. Still, September was the third straight month of great news for homebuilders as they continue to meet pent-up demand from inventory constrained buyers.
While September’s increase is statistically significant, the range is wide: the true number could be as low as 6.4% or as high as 53.2%. A less volatile number to look at is the 12-month rolling total, which is up 12.4% year-over-year, and represents the best one-year span since August 2008. The increase over last year puts the 12-month total at 84.1% of the 50-year average, up 0.7 percentage points from August.
However, the 12-month rolling total of new home sales compared to the 50-year average looks a little worse when taking into account the size of the U.S. population. New home sales per 1,000 U.S. households was 4.7 in September, only 64.3% back to normal but up from 63.4% last month.
In addition, new homes comprised 11.8% of all home sales in September, increasing for the seventh straight month. As new construction continues its upward march, we should expect the share to continue to increase accordingly. While new home sales represented about 11.8% of all sales, it’s still less than half of the pre-recession average of 23.6%. Clearly, there is still much potential for new housing to relieve inventory-constrained buyers.
