Sunday, May 23, 2021

April’s new housing construction and existing home sales

Just two widely watched reports were released this week: the April report on New Residential Construction from the Census Bureau and the Existing Home Sales Report for April from the National Association of Realtors…in addition, the Bureau of Labor Statistics released the Regional and State Employment and Unemployment Summary for April this week, which breaks down the two employment surveys from the monthly national jobs report by state and region....while the text of that report provides a useful summary of this data, the serious statistical 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...

This week also saw first two regional Fed manufacturing surveys for May: the Empire State Manufacturing Survey from the New York Fed, which covers all of New York state, a NYC suburban county in Connecticut, northern New Jersey, and Puerto Rico, reported their headline general business conditions index slipped to +24.3, down from +26.3 in April, still suggesting a broad expansion of First District manufacturing... Meanwhile, the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported their broadest diffusion index of manufacturing conditions fell to +31.5 in May from +50.2 in April, indicating a smaller majority of the region's manufacturing firms reported an increase in their activity this month than in April...

April Housing Starts Reported Lower After Prior Months Revised Lower

The April 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 1,569,000 in April, which was s 9.5 percent (±10.8 percent)* below the revised March estimated rate of 1,733,000 annually, but 67.3 percent (±21.6 percent) above last April's pandemic hit rate of 938,000 housing starts a year....the figures shown in parenthesis indicate the most likely range of the change indicated; in other words, April housing starts could have been up by 1.3% or down by as much as 20.3% from those of March, with revisions of a greater magnitude in either direction from that range possible...with this report, the annual rate for March housing starts was revised from the 1,739,000  reported last month to 1,733,000, and February starts, which were first reported at a 1,421,000 annual rate, were revised from last month's initial revised figure of 1,457,000 annually to a 1,447,000 annual rate, while January starts, which were first reported at a 1,580,000 annual rate, and were revised from an annual rate of 1,584,000  to a 1,642,000 annual rate a month ago, were revised back to a 1,625,000 annual rate with this report....

The annual rates of housing starts reported here were extrapolated from a survey of a small percentage of US building permit offices visited by canvassing Census field agents, which estimated that 140,900 housing units were started in April, down from the 141,400 housing units that were started in March, but up from the 102,100 housing units that were started in February...of those housing units started in April, an estimated 99,800 were single family homes and 40,100 were housing units in structures with more than 5 units, down from the revised 102,800 single family starts in March, but up from the 36,500 units started in structures with more than 5 units in March...

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 often revised housing starts data...in April, Census estimated new building permits for housing units were being issued at a seasonally adjusted annual rate of 1,760,000, which was 0.3 percent (±1.2 percent)* above the revised March rate of 1,755,000, and was 60.9 percent (±1.8 percent) above the rate of building permit issuance in April a year earlier...the annual rate for housing permits issued in March was revised from 1,766,000 to 1,755,000....

Again, these annualized estimates for new permits reported here were extrapolated from the unadjusted estimates collected monthly by canvassing census agents, which showed permits for roughly 160,600 housing units were issued in April, up from the revised estimate of 157,600 new permits issued in March....of those permits issued in April, 108,100 were permits for single family homes and 48,000 were permits for units in structures of more than 5 units, down from the 110,800 single family permits in March, but up from the 41,500 permits for units in structures of more than 5 units...  for graphs and commentary on this report, see the following two posts by Bill McBride at Calculated Risk: Housing Starts decreased to 1.569 Million Annual Rate in April and Comments on April Housing Starts...

Existing Home Sales Decrease 2.7% in April on Record High Prices

The National Association of Realtors (NAR) reported that seasonally adjusted existing home sales fell by 2.7% from March to April, projecting that 5.85 million existing homes would sell over an entire year if the April home sales pace were extrapolated over that year, a pace that was also 33.9% above the annual sales rate projected during the lockdown in April of a year ago....March sales, at a 6.01 annual rate, were revised but remained statistically unchanged from the original report....the NAR also reported that the median sales price for all existing-home types was at a record high $341,600 in April, 19.1% higher than in April a year earlier, which they report "marks 110 straight months of year-over-year gains".....the NAR press release, which is titled "Existing-Home Sales Decline 2.7% in April", 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 read about them in that press release...as 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 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) to see what actually happened during the month...this unadjusted data indicates that roughly 513,000 homes sold in April, up 6.0% from the 484,000 homes that sold in March, and up by 37.5% from the 373,000 homes that sold in April of last year, so we can see the effect of the seasonal adjustment on reported sales, as it anticipates that home sales would increase as spring progresses and lowers reported sales accordingly...that same pdf indicates that the median home selling price for all housing types rose by 4.7%, from a revised $326,300 in March to $341,600 in April, while the average home sales price rose by 3.3% to $364,800, from the $353,100 average sales price in March, while it was up 13.6% from the $321,100 average April home sales price of a year ago...to view both seasonally adjusted and unadjusted graphs and additional commentary on this report, again see the following two posts from Bill McBride at Calculated Risk: NAR: Existing-Home Sales Decreased to 5.85 million in April and Comments on April Existing Home Sales...

 

(the above is the synopsis that accompanied my regular sunday morning 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 picked from the aforementioned GGO posts, contact me…)  

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