June’s durable goods, new and existing home sales

Widely watched reports released last week included the June advance report on durable goods and the June report on new home sales, both from the Census bureau, and the June report on existing home sales from the National Association of Realtors (NAR)…. in addition, the week also saw the release of the Chicago Fed National Activity Index (CFNAI) for June, a weighted composite index of 85 different economic metrics, which came in at to –0.10 in June, up from a upwardly revised –0.16 in May, in an index where any negative reading indicates economic activity has been below the historical trend…that still left the widely watched 3 month average of the index at -0.22 in June, down from -0.14 in May, indicating that national economic activity has continued to be below the historical trend over those recent months…

The week also saw the release of two more regional Fed manufacturing surveys for July: 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 fell to −20 in July, down from readings of −8 in June and from −9 in May, indicating that a larger majority of the region’s manufacturers reported worse business metrics in July than did in those prior months, and the Kansas City Fed manufacturing survey for July, covering western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico, who reported their broadest composite index rose to +1 in July, up slightly from -2 in June and -3 in May, indicating that a minimal plurality of the region’s that region’s manufacturers reported improving business conditions in July than in those prior months…

June’s Durable Goods: New Orders Fell 9.3%, Shipments Rose 0.5%, Inventories Rose 0.2%

The Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders for June (pdf) from the Census Bureau reported that the value of the widely watched new orders for manufactured durable goods decreased by $32.1 billion or 9.3 percent to $311.8 billion, following a​n increase of 16.5% to $344.0 billion in May’s new orders, revised from the 16.4% increase to $343.6 billion shown in last month’s report.…despite the ​big June decrease, year to date new orders are now 7.9% higher than those of 2024, up from the 6.9% year to date increase reported last month..

As is usually the case, the volatile monthly change in new orders for transportation equipment drove this month’s headline change, as those transportation equipment orders fell $32.6 billion or 22.4 percent to $113.0 billion, on a 51.8% decrease to $28,924 million in new orders for commercial aircraft, which are still elevated from a year ago….excluding new orders for transportation equipment, other new orders were up 0.2% in June, and excluding new orders for defense equipment, other orders were down 0.4%, while new orders for nondefense capital goods excluding aircraft, a proxy for future equipment investment, were down 0.7% to $75,590 million…

The seasonally adjusted value of June’s shipments of durable goods, which will be inputs into various components of 2nd quarter GDP after their nominal value is adjusted for price changes, increased by $1.4 billion or 0.5 percent to $302.5 billion, after the value of May shipments increased 0.2% to $301.0 billion, revised but statistically unchanged from the 0.2% increase to $301.0 billion that was reported last month….shipments of transportation equipment led the June increase, as they rose $0.8 billion or 0.8 percent to $98.9 billion, on a 1.1% increase in shipments of motor vehicles and parts, while shipments other than those of transportation equipment were 0.3% higher…meanwhile, the value of shipments of nondefense capital goods excluding aircraft rose $271 million or 0.4% to $75,970 million, after rising a revised 0.5% in May, changes which will be reflected in the 2nd quarter GDP equipment investment figures next week…

At the same time, the value of seasonally adjusted inventories of durable goods, also a major GDP contributor, rose for the ninth consecutive month, increasing by $0.9 billion or 0.2 percent to $588.6 billion, after the value of May’s inventories was revised from $587.8 billion to $587.7 billion, still a 0.2% increase from April….a $0.4 billion or 0.4 percent increase to $102.2 billion in the value of inventories of machinery led the inventory increase, while the value of inventories of transportation equipment fell $263 million​, or 0.1%, on a 0.2% decrease in the value of inventories of motor vehicles and parts and a 0.3% decrease in the value of inventories of commercial aircraft..

Finally, the value of unfilled orders for manufactured durable goods, which is probably a better measure of industry conditions than the widely watched but volatile new orders, rose for the eleventh time in twelve months, increasing by $14.4 billion or 1.0 percent to $1,470.0 billion, following a 3.4% increase to $1,455.6 billion in May, which was revised from the 3.4% increase to $1,455.3 billion reported last month… a $14.1 billion or 1.6 percent increase to $911.9 billion in unfilled orders for transportation equipment drove the June decrease, while the value of unfilled orders excluding transportation equipment increased less than 0.1% to $558,122 million….compared to a year earlier, the unfilled order book for durable goods is 7.2% above the level of last June, with unfilled orders for transportation equipment 11.6% higher than their year ago level, largely reflecting an 14.8% year over year increase in the backlog of orders for commercial aircraft..

New Home Sales Little Changed in June; Prices at a 7 Month Low

The Census report on New Residential Sales for June (pdf) estimated that new single family homes were selling at a seasonally adjusted rate of 627,000 homes annually during the month, which was 0.6 percent (±13.3 percent)* above the revised May rate of 623,000 new single family home sales annually, but was 6.6 percent (±16.2 percent)* below the estimated annual rate that new homes were selling at in June of last year….the asterisks indicate that based on their small sampling, Census could not be certain whether June new home sales rose or fell from those of May, or even from June 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 of new single family homes in May were unrevised from the 623,000 annual rate reported last month, while April’s annualized home sale rate, initially reported at a 743,000 rate, were revised from last months first revision of 722,000 down to 705,000, and​ while March’s new home sales, initially reported at an annual rate of 724,000 and revised from a revised annual rate of 670,000 to an annual rate of to a 659,000 rate last month, were revised to an annual rate of 660,000 with this report…

The annual rates of sales reported here were extrapolated from the estimates of canvassing Census field reps, which indicated that approximately 54,000 new single family homes sold in June, down from the estimated 56,000 new homes that sold in May, and down from the estimated 65,000 new homes that sold in April….the raw figures from Census field agents further led to an estimate that the median sales price of new houses sold in June was $401,800, the lowest median sale price since November, down from the median sale price of $422,700 in May, and down from the median price of $414,000 in June of last year, while the average June new home sales price was at $501,000, down from the revised $504,500 average in May but up from the average sales price of $495,500 in June a year ago….a seasonally adjusted estimate of 511,000 new single family houses remained for sale at the end of June, which represents a 9.8 month supply at the June sales rate, up from the 9.7 month supply in May, which was originally reported as a 9.8 month supply….

Existing Home Sales Fell 2.7% in June on Record High Sales Prices

The National Association of Realtors (NAR) reported that existing home sales fell by 2.7% from May to June on a seasonally adjusted basis, projecting that 3.93 million homes would sell over an entire year if the June home sales pace were extrapolated over that year, a pace that was equal to the annual sales rate projected for June of a year ago, but the lowest sales rate since September of last year…the June home sales decrease came after homes sold at an annual sales rate of 4.04 million in May, which was revised from the 4.03 million rate indicated by last month’s report….the NAR also reported that the median sales price for all existing-home types was at a record $435,300 in June, up 2.0% from the median $426,900 sales price in June a year earlier, which they report was “the 24th consecutive month of year-over-year price increases“…..the NAR press release, which is titled “NAR Existing-Home Sales Report Shows 2.7% Decrease in June“, 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 existing properties are not new additions 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 brokerage, 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 391,000 homes sold in June, up by 0.3% from the 390,000 homes that sold in May, and up by 4.0% from the 476,000 homes that sold in June of last year, in contrast to the no change in sales than the seasonally adjusted figures indicate….that same pdf indicates that the median home selling price for all housing types rose 2.3%, from a revised $423,700 in May to $435,300 in June, while the regional median sales prices ranged from a low of $337,600 in the Midwest to a high of $636,100 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 chosen from the aforementioned GGO posts, contact me…)