New Home Sales At Interim High Of 552K

This morning’s release of the August New Home Sales from the Census Bureau at 552,000 surprised general expectations, and the previous month was revised upward by 15K. The Investing.com forecast was for 515K. This new interim high has not been seen since the recession began in 2008.

Here is the opening from the report:

Sales of new single-family houses in August 2015 were at a seasonally adjusted annual rate of 552,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 5.7 percent (±16.2%)* above the revised July rate of 522,000 and is 21.6 percent (±18.7%) above the August 2014 estimate of 454,000.[Full Report]

For a longer-term perspective, here is a snapshot of the data series, which is produced in conjunction with the Department of Housing and Urban Development. The data since January 1963 is available in the St. Louis Fed’s FRED repository here.

Over this time frame we see the steady rise in new home sales following the 1990 recession and the acceleration in sales during the real estate bubble that peaked in 2005.

The Population-Adjusted Reality

Now let’s examine the data with a simple population adjustment. The Census Bureau’s mid-monthpopulation estimates show a 71% increase in the US population since 1963. Here is a chart of new home sales as a percent of the population.

New single-family home sales are about 7% below the 1963 start of this data series. The population-adjusted version is 45% below the first 1963 sales and at a level similar to the lows we saw during the double-dip recession in the early 1980s, a time when 30-year mortgage rates peaked above 18%. Today’s 30-year rate is around 4%.

For additional perspectives on residential real estate, here is the complete list of our monthly updates: