April New Home Sales Jumped 16.6% Month-over-Month, Surprises Forecast
May 24, 2016
by Jill Mislinski
This morning's release of the April New Home Sales from the Census Bureau came in at 619K, up 16.6% month-over-month. Seasonally adjusted estimates for January 2014 through March 2016 were revised. The Investing.com forecast was for 523K.
Here is the opening from the report:
Sales of new single-family houses in April 2016 were at a seasonally adjusted annual rate of 619,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 16.6 percent (±15.4%) above the revised March rate of 531,000 and is 23.8 percent (±22.8%) above the April 2015 estimate of 500,000. [Full Report]
For a longer-term perspective, here is a snapshot of the data series, which is produced in conjunction with the Department of Housing and Urban Development. The data since January 1963 is available in the St. Louis Fed's FRED repository here. We've included a six-month moving average to highlight the trend in this highly volatile series.
Over this time frame we see the steady rise in new home sales following the 1990 recession and the acceleration in sales during the real estate bubble that peaked in 2005.
The Population-Adjusted Reality
Now let's examine the data with a simple population adjustment. The Census Bureau's mid-month population estimates show a 72.0% increase in the US population since 1963. Here is a chart of new home sales as a percent of the population.
New single-family home sales are about 4.7% below the 1963 start of this data series. The population-adjusted version is 39.1% below the first 1963 sales and at a level similar to the lows we saw during the double-dip recession in the early 1980s, a time when 30-year mortgage rates peaked above 18%. Today's 30-year rate is around 4%.
For additional perspectives on residential real estate, here is the complete list of our monthly updates: