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Economy in Brief

September U.S. New-Home Sales Ticked Up but Still Near the Cycle's Low
by Tom Moeller October 27, 2008

The U.S. Census Department reported that September sales of new single-family homes ticked up 2.7% m/m to 464,000. The rise followed a 12.6% m/m decline during August that was little revised. The level of sales in September was down 66.6% from the July 2005 peak but it was slightly better than Consensus expectations for 450,000 sales.

By region sales in the West accounted for most of last month's increase in the total with a 22.7% gain. However, the rise did not wholly make up a 30.2% slide during August. In the South sales ticked up 0.7% but that hardly dented a 5.7% August drop. Reflecting the weakness in the auto industry, new home sales in the Midwest sales reversed all of their August rise with a 5.6% slide. Suffering greatly from weakness in the financial industry, new home sales in the Northeast dropped 21.4% m/m after an August slide of 34.9%. September sales in the Northeast were roughly 80% below the peaks in 2004-05.

The median price for a new single-family home declined a slight 0.9% to $218,400. However, that slip followed a sharp 7.1% m/m drop in August and prices were off 9.1% y/y. New home prices in September were back to where they were late in 2004. The decline in home prices roughly matched the drop reported last week by the Office of Federal Housing Enterprise Oversight (FHFA). The FHFA figures, (formerly the Office of Federal Housing Enterprise Oversight (OFHEO), as well as the Census Dept. figures, are available in Haver's USECON database.

The number of new homes for purchase again fell sharply, by 7.3% (-25.4% y/y). That reduced the inventory of unsold homes to the lowest level since late-2004. In each of the country's regions the inventory is down roughly one-quarter during the last year.

The month's supply of new homes for sale ticked lower m/m to 10.4, not far from the peak of 11.4 months during August.

Foreclosure prevention efforts and market stability is last week's Senate testimony given by Fed Governor Elizabeth A. Duke and it can be found here.

US New Homes September August Y/Y (%) 2007 2006 2005
Total Sales (SAAR, 000s) 464 452 -33.1 768 1,049 1,279
  Northeast 22 28  -65.1 64 64 81
  Midwest 65 69 -37.5 118 161 203
  South 269 267 -23.8 408 559 638
  West 108 88 -37.9 178 266 356
Median Price (NSA, $) 218,400 220,400 -9.1 243,742 243,067 234,208
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