March reports on durable goods, and new and existing home sales

Widely watched economic reports released last week included the March advance report on durable goods and the March report on new home sales, both from the Census bureau, and the Existing Home Sales Report for March from the National Association of Realtors (NAR)….also released last week was the Chicago Fed National Activity Index (CFNAI) for March, a weighted composite index of 85 different economic metrics, which decreased to –0.03 in March from +0.24 in February, after February’s index was revised up from the +0.15 reported in last month’s report…as a result, the more often cited 3 month average of that index decreased to –0.01 in March from +0.12 in February, which would indicate that national economic activity has been close to the historical trend over recent months, which is what would indicated by a reading of zero…

This week also saw the release of two more regional Fed manufacturing surveys for April: the Kansas City Fed manufacturing survey for April, covering western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico, reported its broadest composite index fell to -4 in April, down from -2 in March, but up from -5 in February, indicating that a small plurality of that region’s manufacturers continued to see worse conditions for the twentieth straight month, while the Richmond Fed Survey of Manufacturing Activity, covering an area that includes Virginia, Maryland, the Carolinas, the District of Columbia and West Virginia, reported its broadest composite index fell to −13 in April from −4 in March, indicating that a larger plurality of that region’s manufacturers were seeing worse conditions than a month ago..

March Durable Goods: New Orders Up 9.2%, Shipments and Inventories both up 0.1%

The Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders for March (pdf) from the Census Bureau reported that the value of the widely watched new orders for manufactured durable goods increased by $26.6 billion or 9.2 percent to $315.7 billion in March, after February’s new orders were revised from the $289.3 billion reported last month to $289.2 billion, still up 0.9% from January’s new orders, statistically unrevised from the originally reported increase….with three consecutive increases, year to date new orders are now up by 5.5% from those of 2024…

New orders for transportation equipment led the new orders increase in March, rising $26.5 billion or 27.0 percent to $124.6 billion, on a 139.0% increase to $44,644 million in the value of new orders for commercial aircraft and a 2.3% increase to $63,937 million the value of new orders for motor vehicles and parts.…excluding orders for transportation equipment, the value of other new orders were virtually unchanged, while excluding just new orders for defense equipment, new orders rose 10.4%…at the same time, the value of new orders for nondefense capital goods less aircraft, a category that’s a proxy for equipment investment, rose 0.1% to $75,130 million…

Meanwhile, the seasonally adjusted value of March shipments of durable goods, which will be included as inputs into various components of 1st quarter GDP after adjusting for changes in prices, rose for the fourth consecutive month, increasing by $0.2 billion or less than 0.1% to $293.0 billion, after the value of February shipments was revised from $292.3 billion to $292.8 billion, and is now up 1.3% from January….lower shipments of transportation equipment limited the March increase, as they fell by $0.5 billion or by 0.5 percent to $96.5 billion, on an 10.5% decrease to $16,304 million in the value of shipments of commercial aircraft….meanwhile, the value of shipments of nondefense capital goods less aircraft rose 0.3% to $74,735 million, after the value of February’s capital goods shipments was revised down from $74,689 million to $74,536 million…

At the same time, the value of seasonally adjusted inventories of durable goods, also a major contributor to GDP, increased by $0.5 billion or by 0.1 percent to $533.3 billion, the fifth consecutive increase, after the value of end of February inventories was revised from $533.2 billion to $532.8 billion, now virtually unchanged from January….a higher value for inventories of machinery, which were up $0.2 billion or 0.2 percent to $94.5 billion, led the increase, while inventories of transportation equipment were down $0.1 billion, or 0.1% at $174.8 billion, as 1.2% greater inventories of defense aircraft were offset by a 1.3% decrease in inventories of motor vehicles…

Finally, unfilled orders for manufactured durable goods, which are probably a better measure of industry conditions than the widely watched but often volatile new orders, rose for the eighth time in nine months, increasing by $27.7 billion or 2.0 percent to $1,429.6 billion, following a 0.1% or $1.5 billion increase to $1,401.9 billion in February, which was revised from the $1.9 billion 0.1% increase to $1,402.4 billion billion reported a month ago….a $28.1 billion or 3.1 percent increase to $931.6 billion in unfilled orders for transportation equipment was responsible for the increase, while unfilled orders for other durable goods were down 0.1% to $498.0 million….the unfilled order book for durable goods is now 2.3% above the level of last March, with unfilled orders for transportation equipment now 3.2% above their year ago level, largely due to a 3.6% increase in the backlog of orders for commercial aircraft…

New Home Sales Reported 7.4% Higher in March on Lower Prices

The Census report on New Residential Sales for March (pdf) estimated that new single family homes were selling at a seasonally adjusted annual rate of 724,000 homes during the month, which was 7.4 percent (± 20.5 percent)* above the revised February annual sales rate of 674,000, and was 6.0 percent (± 14.5 percent)* above the estimated annual rate that new homes were selling at during March of last year….the asterisks indicate that based on their small sampling, Census could not tell whether March new home sales rose or fell from home sales of February, or even from the sales of March of last year, with the figures in parenthesis representing the 90% confidence range for the data in this report, which has the largest margin of error and is subject to the largest revisions of any census construction series….with this report, sales of new single family homes in February were revised from the annual rate of 664,000 reported last month to an annual rate of 674,000, and new home sales in January, initially reported at an annual rate of 657,000 and revised to a 664,000 annual rate last month, were revised down to a 654,000 a year rate with this report, while December’s annualized new home sales rate, initially reported at an annual rate of 698,000 and revised from the initial revision of 734,000 to a 713,000 a year rate last month, were revised to a 720,000 rate with this release….

The annual rates of sales reported here are seasonally adjusted after extrapolation from the estimates of canvassing Census field reps, which indicated that approximately 69,000 new single family homes sold in March, up from the estimated 59,000 new homes that sold in February, and the 56,000 that sold in January….the raw numbers from Census field agents were further used to est​a​blish that the median sales price of new houses sold in March was $403,600, down from the median sale price of $411,500 in February and down from the median sales price of $436,400 in March a year ago, while the average new home sales price was $497,700, up from the $492,700 average sales price in February, and up from the average sales price of $522,500 in March a year ago….a seasonally adjusted estimate of 503,000 new single family houses remained for sale at the end of March, which represents a 8.3 month supply at the March sales rate, down from the revised 8.9 months of new home supply in February, which was originally reported at 8.4 months of supply…for graphs and additional commentary on this report, see the following blog posts by Bill McBride at Calculated Risk:New Home Sales Increase to 724,000 Annual Rate in March and New Home Sales Increase to 693,000 Annual Rate in March; Median New Home Price is Down 13% from the Peak, which in turn links to his lengthy real estate newsletter post on the same subject…

Existing Home Sales Fell 5.9% in March on Prices 2.7% Higher than a Year Ago

The National Association of Realtors (NAR) reported that existing home sales fell at a 5.9% rate from February to March after seasonal adjustment, projecting that 4.02 million existing homes would sell over an entire year if the March home sales pace were extrapolated over that year, a pace that was also 2.4% below the annual sales rate projected for March of a year ago….February homes sales, now indicated at a 4.27 million annual rate, were revised from the 4.26 million rate reported a month ago….the NAR also reported that the median sales price for all existing-home types was at $403,700 in March, which was 2.7% higher than in March a year earlier, and which they report is “the 21st consecutive month of year-over-year price increases.“, even though month over month prices have decreased six out of the last nine months….the NAR press release, which is titled “Existing-Home Sales Receded 5.9% in March“, is in easy to read plain English, so if you’re interested in a regional breakdown, or 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) to see what actually happened during the month….the unadjusted data estimates that roughly 315,000 homes sold in March, up 22.6% from the 257,000 homes that sold in February, but down 3.1% from the 324,000 homes that sold in March of last year, so we can see that it was the effect of a large springtime seasonal adjustment that caused the headline to show a decrease from February….that same pdf indicates that the median home selling price for all housing types rose by 1.7%, from a revised $396,800 in February to $403,700 in March, and was up 2.7% from $392,900 in March of 2024, with regional median home prices ranging from a low of $302,100 in the Midwest to a high of $621,200 in the West…..for both seasonally adjusted and unadjusted graphs and additional commentary on this report, again see the following posts from Bill McBride at Calculated Risk: NAR: Existing-Home Sales Decreased to 4.02 million SAAR in March; Down 2.4% YoY and Newsletter: NAR: Existing-Home Sales Decreased to 4.02 million SAAR in March; Down 2.4% YoY, which serves as a link to his free Real Estate Newsletter coverage of this report…

 

 

(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…)