The U.S. Census Bureau and the Department of Housing and Urban Development reported Tuesday morning that sales of new homes in July decreased to a seasonally adjusted annual rate (SAAR) of 635,000, a drop of 12.8% from the revised June rate of 728,000 but an increase of 4.3% compared with the July 2018 rate of 609,000. The consensus estimate from a survey of economists projected a rate of around 645,000. The June 2019 rate was revised upward by 82,000.
Despite the sharp drop in July new home sales, year to date the sales are up 4% in the first seven months of 2019 compared to the same period in 2018.
At their peak in 2005, new home sales posted a seasonally adjusted annual rate of nearly 1.4 million.
The Census Bureau also reported that the median sales price for new homes sold in July rose by $2,400 to $312,800, and the average sales price rose month over month by $19,400 to $388,000. At the end of July, the number of new homes for sale on a seasonally adjusted basis totaled 337,000, down by 1,000 month over month, and represented a supply of 6.4 months at the current sales rate.
In July, 43% of the estimated 53,000 monthly total comprised sales for homes priced at less than $300,000. That is down four percentage points from June. The pricing data suggests that fewer first-time buyers were able to buy a home in July, not particularly good news for homebuilders.
Sales of homes priced between $300,000 and $399,999 ticked higher month over month from 26% to 27% of all sales. Sales of homes in the range of $400,000 to $499,999 fell by three points to 10% of the total, and sales increased by four points to 10% for homes sold in a price range of $500,000 to $749,999. Home sales for properties priced above $750,000 accounted for 7% of all new home sales in July, up a point compared with June.
In the South, seasonally adjusted year-over-year new home sales for the first seven months of 2019 are up 3.2%. In the Northeast, sales are up 56%, while in the Midwest sales are down nearly 19% and in the West they rose by nearly 8.4%.
On a non-seasonally adjusted basis, homes sold in the South fell by 3,000 to 30,000 month over month in July. Home sales fell by 1,000 to 2,000 in the Northeast, while sales in the Midwest were flat at 5,000. Sales in the West fell by 2,000 to a total of 15,000.
The non-seasonally adjusted for-sale inventory at the end of the month was flat in the Northeast at 29,000 and down by 3,000 in the South to 180,000. In the Midwest, new homes for sale totaled 41,000, up by 2,000 month over month, while supply in the West rose by 1,000 to 86,000.
It’s worth noting that the monthly totals are subject to multiple revisions and those revisions are often significant.