October’s new housing construction and existing home sales
There were just two widely watched economic reports released this past week: the October report on New Residential Construction from the Census bureau, and the Existing Home Sales Report for October from the National Association of Realtors…in addition, the Bureau of Labor Statistics released the Regional and State Employment and Unemployment for October, a report which breaks down the two employment surveys from the monthly national jobs report by state and region….while the text of that report provides a useful summary of this data, the serious statistics aggregation can be found in the tables linked at the end of the report, where one can find the civilian labor force data and the change in payrolls by industry for each of the 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands…
This week also saw the release of two more regional Fed manufacturing survey for November: the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported its broadest diffusion index of manufacturing conditions fell from a reading of +10.3 in October to -5.5 in November, their 16th negative reading in 18 months, which they clearly explain means “nearly 18 percent of the firms reported increases in general activity this month (down from 24 percent last month), while 23 percent reported decreases (up from 14 percent); 58 percent reported no change)..“, and the Kansas City Fed manufacturing survey, covering western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico, who reported their broadest composite index was at -2 in November, up from -4 in October and from -8 in September, which means that just a small plurality of Tenth District manufacturers are still reporting deteriorating conditions this month…
Housing Starts and Building Permits Both Reported Lower in October
The October report on New Residential Construction (pdf) from the Census Bureau estimated that new housing units were being started at a seasonally adjusted annual rate of 1,311,000 units during the month, which was 3.1 percent (±11.6 percent)* below the revised September estimated annual rate of 1,353,000 housing unit starts, and was 4.0 percent (±9.0 percent)* below last October’s pace of 1,365,000 housing starts a year….note that the asterisks indicate that the Census does not have sufficient data to determine whether housing starts actually rose or fell from September, or even from October of a year ago, with the figures in parenthesis the most likely range of the change indicated; in other words, in other words, October’s housing starts could have been up by 8.5% or down by as much as 14.7% from those of September, with even larger revisions possible after a number of months…with this report, the annual rate for September housing starts was revised from the 1,354,000 reported last month to 1,353,000, while the annual rate for August’s housing starts, which was initially reported at 1,283,000 and revised to a 1,361,000 rate last month, was revised up to a 1,379,000 rate with this report…
Those annual rates of starts reported here were extrapolated from a survey of a small percentage of US building permit offices visited by canvassing Census field agents, which estimated that 111,500 housing units were started in October, down from the 115,900 units that were started in September….of those housing units started in October, an estimated 81,700 were single family homes and 28,500 were units in structures with more than 5 units, down from the revised 89,100 single family starts in September, but up from the 25,600 units started in structures with more than 5 units in September…
The monthly data on new building permits, with a smaller margin of error, are probably a better monthly indicator of new housing construction trends than the volatile and often revised housing starts data, which can also be impacted by unseasonal weather….in October, Census estimated new building permits were being issued at a seasonally adjusted annual rate of 1,416,000 housing units, which was 0.6 percent below the September rate of 1,425,000 permits, and was 7.7 percent below the rate of building permit issuance in October a year earlier.…the annual rate for housing permits issued in September was revised down from the 1,428,000 rate indicated by last month’s report….
Again, these annualized estimates for new permits reported here were extrapolated from the unadjusted estimates provided monthly by canvassing census agents, which indicated that permits for 124,800 housing units were issued in October, up from the revised estimate of 113,500 new permits issued in September…the October permits included 84,200 permits for single family homes, up from 76,700 single family permits issued in September, and 35,500 permits for housing units in apartment buildings with 5 or more units, up from 32,100 such multifamily permits a month earlier..
For graphs and commentary on this report, see the following two posts by Bill McBride at Calculated Risk: Housing Starts Decreased to 1.311 million Annual Rate in October and the identically titled Housing Starts Decreased to 1.311 million Annual Rate in October, which links to his in-depth housing newsletter article on this report with exactly the same title..
Existing Home Sales Rose 3.4% in October
The National Association of Realtors (NAR) reported that their seasonally adjusted count of existing home sales increased 3.4% from September to October, the second increase in nine months, projecting that 3.96 million existing homes would sell over an entire year if the October home sales pace were extrapolated over that year, a pace that was also 2.9% above the 3.85 million annual sales rate projected in October of a year ago, when existing home sales had fallen to a 14 year low….the NAR also reported that the median sales price for all existing-home types was $407,200 in October, 4.0% higher than in October a year earlier, which they report was “the 16th consecutive month of year-over-year price gains”…..the NAR press release, which is titled “Existing-Home Sales Grew 3.4% in October; First Year-Over-Year Gain Since July 2021“, 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…as 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 during the selling process…
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 348,000 homes sold in October, up by 5.5% from the 330,000 homes that sold in September, and up by 4.8% from the 332,000 homes that sold in October of last year, so we can see there was only a modest change from the seasonal adjustment to this month’s annualized published figures…that same pdf indicates that the median home selling price for all housing types was 0.1% higher in October, the first increase after three consecutive price deceases, rising from a revised $406,700 in September to $407,200 in October, which was also up 4.0% from the $350,700 median home sales price of October a year ago…by region, median home sales prices ranged from a low of $305,300 in the Midwest to a high of $627,700 in the West, with the Northeast and Midwest showing the steepest decreases in their median sales price over past four months…for both seasonally adjusted and unadjusted graphs and additional commentary on this report, see the following posts from Bill McBride at Calculated Risk: NAR: Existing-Home Sales Increased to 3.96 million SAAR in October and the identically titled NAR: Existing-Home Sales Increased to 3.96 million SAAR in October, which links to his housing newsletter article on this report, again with the same title…
(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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