August 2015 New Home Sales Improves

Written by John Lounsbury and Steven Hansen

The headlines say new home sales improved from last month. The rolling averages smooth out much of the uneven data produced in this series – and this month there was an significant acceleration in the rolling averages.

As the data is noisy, the 3 month rolling average is the way to look at this data. This data series is suffering from methodology issues. Econintersect analysis:

unadjusted sales growth decelerated 0.7 % month-over-month (after last month’s revised acceleration of 12.6 %).

unadjusted year-over-year sales up 25.0 % (Last month was up 25.7 %). Growth this month is on the high end of the range of growth seen last 12 months.

three month unadjusted trend rate of growth accelerated 5.6 % month-over-month – is up 21.1 % year-over-year.

Unadjusted Year-over-Year Rate of Growth – Sales (blue line) and 3 1month rolling average of Sales (red line)

US Census Headlines:

seasonally adjusted sales up 5.7 % month-over-month

seasonally adjusted year-over-year sales up 21.6 %

market expected (from Bloomberg) seasonally adjusted annualized sales of 500 K to 531 K (consensus 515K) versus the actual at 552K.

The quantity of new single family homes for sale remains well below historical levels.

Seasonally Adjusted New Homes for Sale

As the sales data is noisy (large monthly variations).

Year-over-Year Change – Unadjusted New Home Sales Volumes (blue line) with zero growth line emphasized

The headlines of the data release:

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.