July’s new and existing home sales; employment benchmark revision
The only widely watched economic reports that were released last week were the July report on new home sales from the Census Bureau, and the Existing Home Sales Report for July from the National Association of Realtors (NAR)….but this week also saw a preliminary annual benchmark revision of employment data from the Bureau of Labor Statistics, which estimated there were 818,000 fewer payroll jobs in March of 2024 than had previously been reported, which would have come after revisions to the monthly reports of the prior year, and would also impact subsequent employment data revisions going forward….that report includes estimates of the revision to payroll jobs in each major goods producing and service industry sector and government….however, this estimated benchmark revision will not be applied to the monthly employment reports until the annual revision is finalized with the release of the January 2024 employment report on the first Friday of February 2024, when the national employment survey figures will be benchmarked to state tax records….
In addition, this week saw the release of another regional Fed manufacturing survey for August: the Kansas City Fed manufacturing survey for August, which covers western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico; who reported their broadest composite index rose to -3 in August, up from readings of -13 in July and -8 in June, which they report means manufacturing activity declined less in August than it did in June or July, a conclusion they arrive at because a smaller plurality of the district’s manufacturers reported worse business metrics in August than in those prior months…
New Home Sales Reported Higher in July After April, May and June Sales were Revised Higher
The Census report on New Residential Sales for July (pdf) estimated that new single family homes were selling at a seasonally adjusted pace of 739,000 new homes a year, which was 10.6 percent (±16.5 percent)* above the revised June rate at 668,000 new single family home sales a year, and was 5.6 percent (±21.3 percent)* above the estimated annual rate that new homes were selling at in July of last year….the asterisks indicate that based on their small sampling, Census could not be certain whether July’s new home sales rose or fell from those of June, or even from those of July of last year, with the figures in parenthesis representing the 90% confidence range for reported data in this report, which has the largest margin of error and is subject to the largest revisions of any census construction series….hence, these initial new home sales reports are not very reliable and often see significant revisions…with this report; sales new single family homes in June were revised from the annual rate of 621,000 reported last month to a 668,000 a year rate, and home sales in May, initially reported at an annual rate of 619,000 and initially revised down to a 617,000 a year rate last month, were revised up to a 666,000 annual rate with this report, while April’s annualized home sales rate, initially reported at 634,000 and revised from 698,000 up to a 730,000 rate last month, were revised a bit higher, to a 736,000 rate, with this release..
The annual rates of home sales reported here are seasonally adjusted after extrapolation from the estimates of canvassing Census field reps, which indicated that approximately 64,000 new single family homes sold in July, up from the 58,000 new homes that sold in June, and up from the 61,000 that sold in May, but down from the 65,000 new homes that sold in April….the raw numbers from Census field agents’ reports further estimated that the median sales price of new houses sold in July was at $429,800, up from the median sale price of $416,700 in June, but down from the median price of $435,800 in July a year ago, while the average July new home sales price was at $514,800, up from $501,700 average sales price in June, and up from the average sales price of $507,600 in July a year ago, while still down from the record $564,000 average sales price of July 2022….a seasonally adjusted estimate of 462,000 new single family houses remained for sale at the end of July, which represents a 7.5 month supply at the July sales rate, down from the revised 8.4 month supply of unsold homes in June, which had previously been reported as a 9.3 month supply….
Existing Home Sales Rose 1.3% in July on Slightly Lower Prices
The National Association of Realtors (NAR) reported that their seasonally adjusted count of existing home sales rose 1.3% from June to July, their first increase in 5 months, projecting that 3.95 million homes would sell over an entire year if the July home sales pace were extrapolated over that year, a pace that was still 2.5% below the annual sales rate projected for July of a year ago….June home sales, now shown at a 3.90 million annual rate, were revised from the 3.89 million annual rate shown in last month’s report….the NAR also reported that the median sales price for all existing-home types was $422,600 in July, 4.2% higher than in July a year earlier, which they report was “the 13th consecutive month of year-over-year price gains.“…..the NAR press release, which is titled “Existing-Home Sales Advanced 1.3% in July, Ending Four-Month Skid“, is in easy to read plain English, so if you’re interested in the details on housing inventories, cash sales, distressed sales, first time home buyers, etc., you can easily find them in that press release….since sales of existing properties do not add to our national output, neither these home sales nor the prices for which these homes sell are included in GDP, except insofar as real estate, local government and banking services are rendered…
Since this report is entirely seasonally adjusted and at a not very informative annual rate, we usually look at the raw data overview (pdf), which gives us a close approximation of the actual number of homes that sold each month…this unadjusted data indicates that roughly 389,000 homes sold in July, up by 3.5% from the 376,000 homes that sold in June, and up by 4.6% from the estimated 372,000 homes that sold in July of last year, so we can see there was a modest downward seasonal adjustment to bring the annualized published figures down to the level reported…that same pdf indicates that the median home selling price for all housing types fell 1.0%, from a revised $426,900 in June to $422,600 in July, while the regional median home sales prices ranged from a low of $321,300 in the Midwest to a high of $629,500 for homes in the West…
(the above is the synopsis that accompanied my regular sunday morning news links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most of which are picked from the aforementioned GGO posts, contact me…)
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