Just two widely watched monthly reports were released this past week: the August report on New Residential Construction from the Census bureau, and the Existing Home Sales Report for August from the National Association of Realtors... the week also saw the release of another Fed manufacturing survey for September: the Philadelphia Fed Manufacturing Survey for September, covering most of Pennsylvania, southern New Jersey, and Delaware, reported their broadest diffusion index of manufacturing conditions fell from +12.0 in August to -13.5 in September, the 14th negative reading in the past 16 months, meaning that a significant plurality of that region's manufacturers again see deterioration in various facets of their business this month....
New Housing Starts Fell in August, Building Permits Rose
The August report on New Residential Construction (pdf) from the Census Bureau indicated that their widely watched estimate of new housing units that were started during the month was at a seasonally adjusted annual rate of 1,283,000, which was 11.3 percent (±8.3 percent) below July’s revised July estimated annual rate of 1,447,000 housing unit starts, and was 14.8 percent (±9.0 percent) below last August's pace of 1,505,000 housing starts a year...the figures in parentheses show the most likely range of the changes indicated; in other words, August's housing starts could have been down by 3.0% or by as much as 19.6% from those of July, with a 10% chance that the actual change could have even been outside of that wide range...in this report, the annual rate for July housing starts was revised from the 1,452,000 reported last month to 1,447,000, while June’s housing starts, which were first reported at a 1,434,000 annual rate, were revised up from last month's initial revised figure of 1,398,000 annually to a 1,418,000 annual rate 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, which estimated that 114,200 housing units were started in August, down from the 130,600 units started in July, and down from 132,600 housing starts in June...of those housing units started in August, an estimated 84,100 were single family homes and 29,300 were units in structures with more than 5 units, down from the revised 91,200 single family starts in July, and down from the 38,500 units started in structures with more than 5 units in July...
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 August, Census estimated new building permits were being issued for a seasonally adjusted annual rate of 1,543,000 housing units, which was 6.9 percent above the revised July rate of 1,443,000 permits, but was 3.5 percent below the rate of building permit issuance in August a year earlier...the annual rate for housing permits issued in July was revised from the annual rate of 1,442,000 reported last month to a rate of 1,443,000 annually....
Again, these annual estimates for new permits reported here were extrapolated from the unadjusted estimates collected by canvassing census agents, which showed permits for roughly 142,000 housing units were issued in August, up from the revised estimate of 118,700 new permits issued in July...the August permits included 88,400 permits for single family homes, up from 77,800 in July, and 48,000 permits for housing units in apartment buildings with 5 or more units, up from 37,100 such multifamily permits a month earlier...
For graphs and commentary on this report, see the following posts by Bill McBride: Housing Starts Decreased to 1.283 million Annual Rate in August at Calculated Risk, and August Housing Starts: Near Record Number of Multi-Family Housing Units Under Construction in the Calculated Risk newsletter on Substack....
Existing Home Sales Reported Lower in August on Higher Prices
The National Association of Realtors (NAR) reported that their seasonally adjusted count of existing home sales fell 0.7% from July to August, the 6th decrease in 7 months, projecting that 4.04 million homes would sell over an entire year if the August home sales pace were extrapolated over that year, a pace that was also 15.3% below the 4.77 million annual sales rate they projected in August of a year ago..the NAR also reported that the median sales price for all existing-home types was $407,100 in August, 3.9% higher than in August a year earlier, and only lower than the $410,000 median sales price of June.....the NAR press release, which is titled "Existing-Home Sales Decreased 0.7% in August", 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...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 like to check the raw data overview (pdf), which gives us a close approximation to the actual number of homes that sold each month, and their prices....this unadjusted data indicates that roughly 401,000 homes sold in August, up by 7.8% from the 372,000 homes that sold in July, but down by 15.4% from the 474,000 homes that sold in August of last year, so we can see it was the seasonal adjustment that turned this month's headline negative...that same pdf indicates that the median home selling price for all housing types rose for the 7th time in 8 months, from a revised $405,700 in July to $407,100 in August, with the regional median home sales prices ranging from a low of $305,300 in the Midwest to a high of $609,300 in the West....for additional commentary and both seasonally adjusted and unadjusted graphs on this report. check out the following posts from Bill McBride at Calculated Risk: NAR: Existing-Home Sales Decreased to 4.04 million in August and NAR: Existing-Home Sales Decreased to 4.04 million SAAR in August; Median Prices Increased 3.9% YoY in August
(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 picked from the aforementioned GGO posts, contact me…)
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