The Commerce Department released the Census New Home Sales Survey data this morning, and some media were jumping on reported numbers as showing a decline where we would say they were largely in line with analyst expectations of flat volume.

According to the Census, sales of new single-family homes for August came in at a preliminary figure of 295,000 on a seasonally adjusted annual basis, down 2.3% from an upwardly revised 302,000 rate in July.  Compared to a year ago, however, the August volume was up 6.1%.  Median and average sales prices of new homes during August were down from July and against August last year.

Why do we consider this flat?  This data is survey based and the month-over-month change was with in the sampling error range.  In other words, statistically, August was unchanged from July.  Further, as evidence of the swings such survey data can take, look at the revised July number.  It was originally 298,000 and now it has been revised to 302,000.

Looking at the new home sale data on a year-over-year basis reveals that the negative year-over-year numbers in the first half of this year and now the positive numbers year-over-year were thanks to the temporary effects of the new home buyer tax credit that expired for sales as of April 30, 2010. If you draw a trend line curve you can see that we are on an upward trend and are likely where we would have been regardless of the tax credit’s illusory effect of pumping up sales in 2009 and early 2010.




Real transaction data provided by Housing IntelligencePro mirrors the stabilization in the Census survey, but provides greater detail on the types of properties that are selling and specific geographic areas.  Based upon the deed records thus far received for the months of August and September, it is clear that the stabilization in new home sales volume is a result of strength in the single family sector, while attached new homes are struggling.  This is consistent with the continued increase in renting by those who either cannot afford to own a home due to lack of employment, or previous home owners who got burned in the housing crash.  As a result, would-be new home buyers of attached properties are electing to rent attached homes, not purchase them.  That leaves it up to single family detached homes to deliver the weak increases in new home sales volume.

We also continue to see the trend that market performance varies dramatically.  Looking at preliminary local closing information for areas with at least 500 new home closings over the last 12 months, July and preliminary August data look most promising for Columbia SC, Rochester NY, Baton Rouge LA, Omaha NE, and Albany NY.  Our preliminary leaders last month, Jacksonville and Tampa, are still in positive territory but did not keep up their initial pace of new closings.  At the bottom of the list are Charleston and Myrtle Beach in South Carolina, Lakeland FL, and Kennewick WA.

We expect these trends to continue through year end: weak but positive growth relative to 2010; growth in single family detached but declines in attached; and improvements primarily in healthier markets.

For additional market-level data and analysis please visit our website at http://www.housingintelligence.com.  For more detailed information on  these and other indicators, please visit the following links: