Need To Know News

October New Sales fell 5.3% to 433k units annualized, worse than expected, against a downwardly revised 0.7% increase to 457k units annualized prior. Houses for sale in October cratered by 8% to 381k units annualized following a 3% drop to 414k units annualized in September. New Home sales in the US are currently at their lowest level since January 1991 when they totaled 401k units annualized.

The median new home sales price fell 1.7% to $218k in October, and the average new homes sales price fell 4% to $272.3k. The supply of new homes grew 1.8%, reflecting an 11.1 months supply at the current sales pace.

The October New Home sales report shows a considerable amount of variability between regions. Sales in the West fell 18% to 91k after a 20.7% increase to 111k previously, while Sales in the Northeast increased 22.6% to 38k. Unfortunately the two regions leading the October decline, the South and West, make up a more significant portion of the marketplace. The number of annualized sales in both the South and West are at levels not seen since 1982.

October New Home Sales are expected to fall 4% to 445k annualized following a 2.7% increase to 464k annualized units in September

Intense financial market deterioration in October is almost certain to have put further downward pressure on the already struggling market for new homes. Prospective buyers are likely to have been further whittled away by the rapid climb in uncertainty over the period. Tight credit has undoubtedly made it more difficult for consumers to get mortgages.

Related data include:
* November NAHB Housing Index fell to a record low 9 (14 prior)
* October New Home Sales fell 3.1% to 4.98mln
* October Housing Starts fell 4.5% to 791k
* October Building Permits fell 12% to 708k

October New Home Sales are expected to fall 4% to 445k annualized following a 2.7% increase to 464k annualized units in September

Intense financial market deterioration in October is almost certain to have put further downward pressure on the already struggling market for new homes. Prospective buyers are likely to have been further whittled away by the rapid climb in uncertainty over the period. Tight credit has undoubtedly made it more difficult for consumers to get mortgages.

Related data include:
* November NAHB Housing Index fell to a record low 9 (14 prior)
* October New Home Sales fell 3.1% to 4.98mln
* October Housing Starts fell 4.5% to 791k
* October Building Permits fell 12% to 708k

September New Home Sales rose 2.7% to 464k — better than the 450k expected — after a downwardly revised 452k in August (previously 460k). Y-o-Y, New Home Sales were down 33.1% from 694k in Sep-07.

New homes for sale on the market fell 7.3% to 394k following an upwardly revised 425k in August. That was the biggest drop on record in percentage terms (since Jan-63) and the 394k represents the lowest number of new homes on the market since Jun-04. There is currently a 10.4-month supply of new homes on the market, down 8.8% from August.

The median new home sales price in September declined 0.9% to $218,400, still the lowest since Sep-04. The average price increased 4.3% to $275,500, the biggest jump since April.

New Home Sales in the Northeast fell 21.4% to a record low 22k. In the Midwest, sales dropped 5.8% to 65k, the lowest since Jan-91. Sales jumped 22.7% in the West and rose 0.7% in the South.

• September New Home Sales are expected to fall 2.2% to 450k units annualized following an 11.5% decline to 460k units annualized in August

Further deterioration in the market for new homes is expected in September, though the rate of decline is likely to be considerably less than the 11.5% drop in August. The much-better-than-expected surge in September Existing Home Sales is suggestive of an improved sales market, however the outlook for New Home Sales remains considerably worse than the market for existing homes, thanks largely to the lack of demand for new homes in clustered developments. Credit market issues also pose downside risks to September sales, as broken transactions and the inability to get loans will inhibit potential buyers.

Related data:
• The October NAHB Housing Market Index fell to a record low of 14 following a reading of 17 in September
• September Existing Home Sales grew 5.5% following a 2.2% decline in August
• September Housing Starts fell to 817k units annualized from 872k units annualized in August
• September Building Permits fell to 786k annualized from 857k annualized in August

August New Home Sales fell 11.5% to 460k units annualized, much worse than the 1% drop expected, following an upwardly revised 520k units annualized in July. The August drop in New Home Sales is the largest since November 2007 when sales fell 13%, while the estimated annualized total for new sales fell to its lowest level since January 1991 when sales fell to 401k. New Homes Sales in August were down 34.5% from last August when sales totaled 702k.

New Homes for sale fell 4.4% to 408k annualized in August, following an upwardly revised 3.6% drop to 427k units recorded in July. The August drop in New Homes for Sale was the largest since November 1963. The supply of New Homes in the market grew 5.8% in August, reflecting a 10.9 month supply, following a 5.5% drop to a 10.3 month supply reported in July.

The Median Home Sales price for New Homes in August fell 5.5% to $221.9k, which is the lowest since September 2004. The Average New Home Sale price in August fell 11.8%, its steepest drop on record, to $263.9k.

New Home Sales in the Northeast fell 31.9% to 32k, following a 30.6% increase to 47k in July. New Home Sales in the West fell 36.1% to 78k, following an 8.9% increase to 122k in July.

August New Home Sales are expected to fall 1% to a 510k annual rate after a 2.4% jump to 515k in July. New homes on the market totaled a 10.1-month supply in July, while the median new home sale price was $230,700.

If August data are worse than expected, they could challenge June’s 503k pace of sales, which was the lowest since Sept-91. The risk is all to the downside, as credit conditions remained extremely tight in August. Existing Home Sales dropped 2.2% over the period – despite price declines – and inventories stayed elevated.

Credit conditions could improve next month if Congress passes a bailout bill, but the time horizon of such improvements is uncertain at best.

Related data:
• The increasingly useless NAHB Housing Market Index rose to 18 in September vs. 16 in August
• MBA Mortgage Applications fell 10.6% last week after soaring 33% the prior week
• The July S&P/CaseShiller Home Price Index is expected to be down 16% y-o-y
• The July House Price Index fell 0.6% following a 0.3% decline in June