July’s new housing construction and existing home sales

The only widely watched economic reports that were released last week were the July report on New Residential Construction from the Census Bureau, and the Existing Home Sales Report for July from the National Association of Realtors (NAR)….meanwhile, the Bureau of Labor Statistics released the Regional and State Employment and Unemployment Report for July, a report which breaks down the two employment surveys from the monthly national jobs report by state and region….while the text of this 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…

In addition, this week saw the release of another regional Fed manufacturing survey for August: the Philadelphia Fed Manufacturing Survey for August, covering most of Pennsylvania, southern New Jersey, and Delaware, reported their broadest diffusion index of manufacturing conditions fell from +13.9 to –0.3, as “the share of responses indicating increases and decreases (in manufacturing activity) were evenly split (at 30 percent), while 36 percent reported no change…

Housing Starts Reported Higher in July; Building Permits 2.8% Lower

The July 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 1,428,000 in July, which was 5.2 percent (±14.7 percent)* above the revised June housing unit start rate of 1,358,000, and was 12.9 percent (±13.6 percent)* above last July’s pace of 1,265,000 housing starts annually, which had been a four year low…..the asterisks indicate that the Census does not have sufficient data to determine whether housing starts actually rose or fell from June, or even from that four year low of a year earlier, while the figures in parenthesis indicate the most likely range of the change indicated; in other words, July’s housing starts could have been down by 9.5% or up by as much as 19.9% from those of June, with even larger revisions eventually possible…in this report, the annual rate for June housing starts was revised up the 1,321,000 reported last month to 1,358,000, while May starts, which were first reported at a 1,256,000 unit annual rate, were revised from last month’s initial revised figure of 1,263,000 annually to an annual rate of 1,282,000 with this report….

Those annual rates of housing starts reported here were extrapolated from a survey of a small percentage of US building permit offices visited by Census field agents, from which they estimated that 130,200 housing units were started in July, up from the 126,200 units started in June, and up from the 117,800 starts estimated in May….of those housing units started in July, an estimated 86,500 were single family homes and 42,000 were units in structures with more than 5 units, down from the revised 87,400 single family starts in June, but up from the 36,800 units started in structures with more than 5 units in June…

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 ​o​ften sharply revised housing starts data….in July, Census estimated new building permits were being issued for a seasonally adjusted annual rate of 1,354,000 housing units, which was 2.8 percent below the revised June annual rate of 1,393,000 permits, and was 5.7 percent below the rate of building permit issuance in July a year earlier…the annual rate for housing permits issued in June was revised from 1,397,000 to 1,393,000….

Again, these annualized estimates for new permits reported here were extrapolated from the unadjusted estimates collected by canvassing census agents, which showed permits for 120,800 housing units were issued in July, down from the revised estimate of 128,500 new permits issued in June…the July permits included 78,500 permits for single family homes, down from 79,900 single family permits in June, and 37,500 permits for housing units in apartment buildings with 5 or more units, down from 44,300 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 Increased to 1.428 Million Annual Rate in July and Newsletter: Housing Starts Increased to 1.428 million Annual Rate in July, which serves as a link to his real estate newsletter post on this report…

Existing Home Sales Rose 2.0% in July on Lower Prices

The National Association of Realtors (NAR) reported that their seasonally adjusted count of existing home sales rose 2.0% from June to July, projecting that 4.01 million homes would sell over an entire year if the July home sales pace were extrapolated over that year, a pace that was also 0.8% above the annual sales rate projected for July of a year ago….June home sales were unrevised at the 3.93 million annual rate as shown in last month’s report, and were down 2.7% from May….the NAR also reported that the median sales price for all existing-home types was $422,400 in July, 0.2% higher than in July a year earlier, which they report was “the 25th consecutive month of year-over-year price increases.“…..the NAR press release, which is titled “NAR Existing-Home Sales Report Shows 2.0% Increase in July“, 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 388,000 homes sold in July, down by 0.8% from the 391,000 homes that sold in June, and down by 0.5% from the estimated 390,000 homes that sold in July of last year, so we can see there was a modest upward seasonal adjustment to bring the annualized published figures up to the level reported…that same pdf indicates that the median home selling price for all housing types fell 2.4%, from a revised $432,700 in June to $422,400 in July, while the regional median home sales prices ranged from a low of $333,800 in the Midwest to a high of $620,700 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 chosen from the aforementioned GGO posts, contact me…)   

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