Today, the U.S. Census Department released its monthly New Residential Home Sales Report for April showing an unexpected “surge” in new home sales.Probably the most notable figure in today’s report was the 10.9% decline to the median home price, the largest decline since December 1970, further reflecting the weakness brought on by the inventory oversupply and continued reduced demand.
It’s important to note, however, that with this report the Census Department revised every month back to January 2005 as formally imputed permit data, a factor in the new home sales estimate, was replaced with actual data.
This, as well as other factors, effected both sales and price data, including a 22% downward revision to the March 2007 reported median home price providing further evidence that some caution should be used when interpreting this report.
The following charts illustrate the revisions to sales and median price published in today's report (click for larger versions).
As with prior months, on a year-over-year basis sales are still declining in the double digits at 10.6% below the sales activity seen in April 2006.
It’s important to keep in mind that these declines are coming on the back of the significant declines seen in 2006.
This should not be understated as it is clearly showing continued and even accelerating weakness to new home sales.
The following charts show the extent of sales declines seen since 2006 as well as illustrating the further declines 2007 is showing on top of the 2006 results (click for larger versions)
Note that the last chart essentially combines the year-over-year changes seen in 2005 and 2006 and shows sales trending down precipitously as compared to the peak period.
Look at the following summary of today’s report:
National
- The median price for a new home was down 10.9% as compared to April 2006.
- New home sales were down 10.6% as compared to April 2006.
- The inventory of new homes for sale declined 4.8% as compared to April 2006.
- The number of months’ supply of the new homes has increased 4.8% as compared to April 2006.
- In the Northeast, new home sales were up 43.1% as compared to April 2006.
- In the West, new home sales were down 25.4% as compared to April 2006.
- In the South, new home sales were down 3.4% as compared to April 2006.
- In the Midwest, new home sales were down 28.1% as compared to April 2006.
