There was little change in the trends for the relative health of the U.S. new home market in June 2024.
The state of that relative health however is far from healthy. While not representing an outright drag on the U.S. economy, the new home market is not a robust contributor to it either. If you want a one-word summary of the state of its relative health, the word "meh" comes to mind.
Following the upward data revisions that altered our view of the trends from negative to neutral last month, perhaps that was to be expected. Or not.
You be the judge. The following charts present the U.S. new home market capitalization, the number of new home sales, and their sale prices as measured by their time-shifted, trailing twelve month averages from January 1976 through June 2024.
Trend for sales ticks down:
Trend for prices ticks up:
As a quick summary of what we see, the trend for the new home market cap ticked up, but not by enough to get excited about. Meanwhile, the underlying number of new home sales ticked down and the trailing average new home sale price ticked up by a small amount in our initial estimates for June 2024. Multiply those last two things together to get the picture for the market capitalization of the new home market in the U.S. and the product is still "meh".
For its part, Reuters played up the negatives in the first estimates of June 2024's new home sales:
Sales of new U.S. single-family homes fell to a seven-month low in June as higher mortgage rates and prices weighed on demand, further evidence that the housing market recovery faltered in the second quarter.
New home sales slipped 0.6% to a seasonally adjusted annual rate of 617,000 units last month, the lowest level since November, the Commerce Department's Census Bureau said on Wednesday. The sales pace for May was revised up to 621,000 units from a previously reported 619,000 units....
New home sales fell 7.7% in the Northeast last month and dropped 6.9% in the Midwest, which is viewed as a more affordable region. They surged 1.4% in the West and gained 0.3% in the densely populated South.
The median new house price dipped 0.1% to $417,300 in June from a year ago. Most of the houses sold last month were below the $499,999 price level.
Unfortunately, that median price level remains well above what a median household in the U.S. can afford. We'll look at that topic in the near future.
References
U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 24 July 2024.
U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 24 July 2024.
Image credit: New Home Construction by Paul Brennan on PublicDomainPictures. Creative Commons CCO Public Domain.
Labels: real estate
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