The Census Bureau reported that New Home Sales for October 2009:

Sales of new one-family houses in October 2009 were at a seasonally adjusted annual rate of 430,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

This is 6.2% (±17.6%)* above the revised September rate of 405,000 and is 5.1%  (±14.9%)* above the October 2008 estimate of 409,000.

The median sales price of new houses sold in October 2009 was $212,200; the average sales price was $261,100. The seasonally adjusted estimate of new houses for sale at the end of October was 239,000. This represents a supply of 6.7 months at the current sales rate.

The standard disclaimers apply to this data point: Both the monthly and the annual data are below the margin of error.  Monthly data was reported as +6.2%, +/- 17.6% (whoops!). Annually, sales improved 5.1% +/- 14.9%.

As Pete points out, all of the gains were in the South.

Assuming that the number turns out to be actually positive (something we cannot know for sure now), this will be the first year over year gain in new Home Sales since the market peaked in 2005.

The other decent news: Inventory is down significantly from the highs of 12.4 months supply to 6.7 in October.



Chart courtesy of Calculated Risk


There are some improvements in this report, but New Homes, which have been competing with foreclosures, likely have a ways to go before we can call this market healthy.


The Census Bureau

Category: Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

9 Responses to “New Home Inventory Declines”

  1. dan10400 says:

    why is the margin of error so high?

  2. CNBC Sucks says:

    Hey Ritholtz, if you spend trillions of dollars to prevent massive system failure and try to reflate the economy, you figure SOMETHING has to work out at some point, right? A housing mini-rebubble would be better than a sharp stick in the eye. And the inevitable dollar collapse will be catastrophic and disastrous no matter how much money we print at this point.

    The Great CNBC Sucks has decided to approach all things in a positive light. As a fine young man in the Ritholtz FF league told me, “The gloom and doom gets to be too much. Instead of bitching and moaning about all thats wrong, why not figure out how you can make some money off of it?” The fine young man is absolutely right.

    And since you mentioned the region, in the spirit of Thanksgiving and the upcoming Holiday Season, I want to make peace with the South, which I have bashed on your blog for over a year. The Tennessee Titans are currently The Great CNBC Sucks’ favorite team in the NFL. Go Titans! Hee Haw!

  3. Marcus Aurelius says:

    This market and/or the economy in general won’t be healthy until mark-to-market valuations are required AND the devalued assets the banks are holding are liquidated at market prices. Anyone buying a new home right now (that is, anyone going into debt to buy — excepting those wealthy enough to pay cash and not to be concerned by substantial losses) will rue the day they let their emotions and optimism get the best of them.

  4. Marcus Aurelius says:

    dan10400 Says:
    why is the margin of error so high?

    Because no one knows WTF is going on, and any positive number must be hedged, lest the person making the observation looks like a complete asshat when reality (readjusted numbers to be released in the next quarter) reasserts itself.

  5. Adult Franklin411 says:

    Question: Has the average price of existing inventory gone up? I bet it has.

    Like I said on another thread the other day, you can’t talk housing units without discussing price. Anecdotally I know of beautiful unsold houses in the $500k+ range on golf courses and resort areas. They’ve been sitting for a while.

  6. ashpelham2 says:

    Also anecdotally, the house next to mine just sold for a nice premium over what the owners paid for it in 2003. We bought ours in February 04. We have no plans to sell or move, but I am feeling a tugging. The wife would never even discuss it.

    Maybe we’ll just divorce. :D I’ve got my eye on a hot little brunette down at the bookstore anyway. (That would be a lot less costly, I’m sure!)

  7. Brendan says:

    Price schmise… Average Schmos are no longer assuming they can refinance in a couple of years with massive equity and now they are back to buying houses based on how much the payments will be, not how much the bottom line is. Interest rates are still getting lower even when I keep thinking they can’t get any lower. The Fed knows this, they’re not always as big of fools as they’re made out to be. They know they’re buying liquidity in the RE market with their low rates. And if they want to get these toxic assets off the books, they need to get all those mortgages churned over one way or another, even if it means some good inflation is in store down the road. What’s a few trillion amongst friends? If this uptick is true, it’s probably a sign that people think the market and interest rates have bottomed and it’s time to buy.

    I’m amongst those that think the market, on average, has pretty much bottomed. I just wish I could hurry up and move to a place I want to stay in and get locked into one of those nice 30-year fixed loans at under 5%. We all know that, after adjusted for inflation, the bank will be paying me to borrow their money at that rate in a few years. Now if the better half could just get done with her current commitments!

  8. ezduzit says:

    there are a zillion homes that are uncounted and not offered for sale that have owners just waiting for some stability so that they can get out. all of a sudden there will be a surge in unsold homes that people can’t quantify.

  9. JustinTheSkeptic says:

    I apologize for wanting to come undone every time I hear the numbers on housing. And then to hear people even suggest that the bottom is in??? Has our entire system become so rigged that even the stright thinkers believe the facades that have been erected? Like car salesmen and preachers, numbers lie, while sounding important and true.