Post by unlawflcombatnt on Jun 26, 2007 14:17:20 GMT -6
Today's New Home Sales report for May showed an annualized rate of 912K per year. This is -7% below the initially stated 981K for April. (Over the last 12 hours, April's number was revised downward to only 930K, making the May decline appear smaller.)
All 3 previous months' totals were revised downward. February's previously posted 856K was revised down to 840K, March's previous 844 was revised down to 827K, and April's 981K down to 930K. (Again, all 3 of these downward revisions took place in the last 12 hours.)
The year-to-date decline was the most dramatic. For the 1st 5 months of 2007, New Home Sales were down 21%, going from 487K for the same 5 months of 2006, down to 384K in 2007.
New Home Prices declined -0.9% from May 2006's $238.2K down to May 2007's $236.1K.
Total home inventory actually declined, based on the total number of units at all stages of construction. The decline was from 564K in May 2006 to 536K in May 2007. However, in terms of "months' supply" of inventory, there was an increase from 6.2 months' worth to 7.1 months' worth,
In contrast to the 'total' inventory, however, the 'completed' inventory (homes actually built) increased significantly over the last year. May 2007's New Home Completions was 177K, vs. only 128K completions in May 2006. (See Table 3) This is an increase of 49K, or an increase of +38%.
More interesting is the comparison of monthly totals for New Home Sales vs. New Home Completions. May 2007's actual New Home Sales were 85K, which is 92K less than the 177K actually completed.
New Homes are now staying on the market a median of 5.7 months, vs. only 3.7 months in May 2006.
Below is a graph from Briefing.com showing the longer-term trend in New Home Sales.
Below is another graph from Briefing.com showing the longer-term trend in New Home prices.
The housing market is clearly collapsing. And there is no bottom in sight. Even homebuilder Lenar's CEO said "there is no bottom in the housing market." With New Home Completions more than double New Home Sales, the oversupply of homes on the market is still increasing. Further increases in the oversupply of homes is being added to by the increasing number of foreclosures. With this increasing supply, prices have nowhere to go but down.
As the supply increases, the demand for New Home construction will continue to fall. As a result, employment in the home construction industry will continue falling.
As economists Nouriel Roubini and Dean Baker have already predicted, we are well on our way to a housing bubble collapse-induced recession. In fact, without the government's continual manipulation of economic statistics, the statistics would already have shown us to be in a recession.
Eventually, however, the government's efforts to manipulate statistics will not be able to obscure the truth about our economy.
Today's Census Bureau report on New Home Sales can be found at:
www.census.gov/const/newressales.pdf
All 3 previous months' totals were revised downward. February's previously posted 856K was revised down to 840K, March's previous 844 was revised down to 827K, and April's 981K down to 930K. (Again, all 3 of these downward revisions took place in the last 12 hours.)
The year-to-date decline was the most dramatic. For the 1st 5 months of 2007, New Home Sales were down 21%, going from 487K for the same 5 months of 2006, down to 384K in 2007.
New Home Prices declined -0.9% from May 2006's $238.2K down to May 2007's $236.1K.
Total home inventory actually declined, based on the total number of units at all stages of construction. The decline was from 564K in May 2006 to 536K in May 2007. However, in terms of "months' supply" of inventory, there was an increase from 6.2 months' worth to 7.1 months' worth,
In contrast to the 'total' inventory, however, the 'completed' inventory (homes actually built) increased significantly over the last year. May 2007's New Home Completions was 177K, vs. only 128K completions in May 2006. (See Table 3) This is an increase of 49K, or an increase of +38%.
More interesting is the comparison of monthly totals for New Home Sales vs. New Home Completions. May 2007's actual New Home Sales were 85K, which is 92K less than the 177K actually completed.
New Homes are now staying on the market a median of 5.7 months, vs. only 3.7 months in May 2006.
Below is a graph from Briefing.com showing the longer-term trend in New Home Sales.
Below is another graph from Briefing.com showing the longer-term trend in New Home prices.
The housing market is clearly collapsing. And there is no bottom in sight. Even homebuilder Lenar's CEO said "there is no bottom in the housing market." With New Home Completions more than double New Home Sales, the oversupply of homes on the market is still increasing. Further increases in the oversupply of homes is being added to by the increasing number of foreclosures. With this increasing supply, prices have nowhere to go but down.
As the supply increases, the demand for New Home construction will continue to fall. As a result, employment in the home construction industry will continue falling.
As economists Nouriel Roubini and Dean Baker have already predicted, we are well on our way to a housing bubble collapse-induced recession. In fact, without the government's continual manipulation of economic statistics, the statistics would already have shown us to be in a recession.
Eventually, however, the government's efforts to manipulate statistics will not be able to obscure the truth about our economy.
Today's Census Bureau report on New Home Sales can be found at:
www.census.gov/const/newressales.pdf