Sales of newly-constructed single-family homes dropped by 1.6% in November from October's pace, providing more evidence that the housing recovery is slowing down.
November sales of new single-family homes reached an annual, seasonally-adjusted rate of 438,000, according to data released Tuesday by the Commerce Department. November’s numbers are 1.6% below the November 2013 estimate of 445,000. October’s figures were revised downward to an annual pace of 445,000.
The new home sales data–which tallies the number of newly constructed homes with a committed sale each month–is considered a measure of economic momentum as well as an indicator of future consumer purchases of furniture and appliances. But the report is volatile due to a relatively small sample size and a margin of error around 15%.
Taken together with Monday's existing (previously-owned) home sales report, the data provide strong evidence that the housing recovery is slowing. Existing-home sales fell by just 6.1% in November, to a seasonally-adjusted annual pace of 4.93 million, the lowest level since May. However, November's existing home sales pace marked the second month since October 2013 that the sales pace was higher (by 2.1%) than in the prior year.
Meanwhile, groundbreakings on new homes fell by 2.1% in November compared to October. Builders are betting on multi-family: November starts on units with five or more units rose 7.6%, while single-family starts rose 5.4%. Permitting fell by 5.2% in November overall.
Tuesday’s release of new home sales includes a revision of prior months’ numbers, which shows that this year's sales pace has been slowing since September.
New home sales numbers (annualized, seasonally adjusted):
November 2014: 438,000
October 2014: 445,000 (revised from 458,000)
September 2014: 455,000 (revised from 467,000)
August 2014: 448,000 (revised from 453,000)
July 2014: 399,000
June 2014: 409,000
May 2014: 458,000
April 2014: 413,000
The median price of a new home sold in November was $280,900, down from October’s (upwardly revised) $290,100; the average sales price was $321,800, also down compared to October’s (upwardly revised) $375,200. At the end of November inventory stood at 213,000, a 5.8-month supply at the current sales pace.
Sales of new homes represent only about one-tenth of the housing market and data in the monthly Commerce report is revised frequently (three times), making it a less-reliable measure. By contrast, the steadier Existing-Home sales report from the National Association of Realtors tracks the bulk of the market–previously-owned homes–and shows less volatility.
