The U.S. Census Bureau and the Department of Housing and Urban Development said sales of newly constructed homes fell 12.8 percent in July to a seasonally adjusted annual rate of 635,000 units. Forecasts pinned that number at 645k. While missing the mark by 10,000 units and a 12.8 percent drop sound fairly significant, context is hugely important in this case.
The 635k number constitutes a 4.3 percent improvement from the same month last year. But this data is prone to heavy revisions, and that's where the story gets better for the housing market this month. July's 635k may or may not be revised. What we do know is that June's number was revised in rather grand fashion--nearly 14 percent higher than the initial reading. With that, June was 20.9% higher than May, and logged an annual pace of 728,000 units--the highest level since 2007.
On an unadjusted basis, there were 53,000 homes sold in July compared to 66,000 in June and 49,000 in July 2018. Sales in the first seven months of 2019 totaled 414,000 thousand homes, a 4.1 percent increase over the 398,000 units sold over the same period in 2018. Strikingly, that entire year-to-date (YTD) gain is concentrated in two regions. Sales in the South and West are up 7.2 percent and 9.5 percent respectively while there have been double-digit annual slowdowns, 15.4 percent and 12.4 percent, in the Northeast and Midwest.
The median price for which a house sold in July was $312,800 while the average was $388,000. During the same month last year, the respective sale prices were $327,500 and $392,300.
At the end of July there were 337,000 homes available for sale nationwide. This is estimated at a 6.4-month supply at the current rate of sales, up from 5.5 months in June and 6.2 months the prior July. These homes are largely concentrated in the South, with 180,000 newly built homes for sale. The West had 86,000 while the inventories in the Northeast and Midwest consisted of only 29,000 and 41,000 units.
Despite its dismal YTD figures, the Northeast saw the only monthly increase in sales in July. They were up 50 percent compared to June and were 56.0 percent higher than in July 2018. Sales in the Midwest declined by 11.1 percent month-over-moth and were 18.8 percent lower on an annual basis. There was a 16.1 percent decline in the South compared to the previous month, but a 3.2 percent gain year-over-year. The West's seasonally adjusted annual sales fell 14.2 percent but were still up 7.3 percent compared to a year earlier.