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Two new economic reports from June covering the housing industry show promising results, with both residential construction (otherwise known as housing starts), and sales of newly constructed homes taking a nice bounce in June. This was welcome news after dramatic declines hit the housing market in early Spring.
But will it hold?
You knew it was coming, but we just couldn’t see it until statistical data caught up with the rapidly changing U.S. economy. But now, we are getting a snapshot of these changes and they are breathtaking…and a little scary. Hold on tight…it’s going to get worse before it gets better.
The U.S. Census Bureau and the U.S. Department Housing and Urban Development announced this week that sales of newly built residences fell in February 2020. Housing starts also fell in February. This housing market downturn is likely a precursor to much more dramatic declines when figures for March 2020 are reported – a time period when the coronavirus (COVID-19) pandemic began to really take hold across America, forcing State and City governments across the U.S. to order residents of all non-essential businesses to stay home.
Last week, Strata-gee reported that housing construction starts jumped mightily in December 2019 – but now we learn in a new report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development that new home sales actually declined at the same time. Typically, analysts like to see both home sales and construction starts increase together as an indicator of a healthy economy.
In new data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, the readings appear split with housing starts showing increases while new home sales declined. Housing, a prime component of the overall U.S. GDP has been in a bit of a swell over the last couple of months, driven largely by low interest rates stimulating demand for homes.
In the choppy waters of today’s current economy, we continue to get mixed signals – this time from the housing market. Last week, we learned that residential construction starts declined in June by 0.9% below the rate in May. This week, we find that sales of newly built homes in June increased by 7% as compared to sales in May.
The latest data from the Census Bureau shows that sales of new single-family housing in April dropped to a rate of 673,000 on a seasonally adjusted annual basis. This level is down a substantial 6.9% from the adjusted rate for March of 723,000 houses sold.
Two different economic reports on the residential housing market show conflicting results. One report is on the latest data in housing starts…the other contains the latest results on new home sales. But these reports paint two very different pictures. Is housing growing? Or rather, is it fading?
New data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development shows that sales of new single-family homes in December were a seasonally adjusted annual rate of 621,000 or 3.7% above the revised rate in November of 599,000. However, it remained 2.4% below the year-ago rate of sales in December 2017 of 636,000.
In what many feel is yet another sign of a brewing economic storm, sales of new single-family homes in October showed a significant drop of 8.9% below the rate of home sales in September, according to new data from the United States Census Bureau. With this result, the inventory of new homes available for sale jumped to 7.4-months, a 14% jump in unsold newly constructed homes.
