Monday, November 18, 2013

New home sales moderate in West region during August

New single-family home sales in the U.S. West were down 22 percent from August 2012 to August 2013, coming in at 7,000 new homes for August 2013, and marked the second month in a row during which new home sales declined form the same month one year earlier. According to the most recent Census Bureau report on new home sales, new home sales grew, year over year through 2012 and during the first half of 2013. In July and August 2013, however, new home sales declined when compared year over year, showing that new home sales have moderated in the face of rising interest rates. 

The report, which monitors sales activity for newly constructed houses, showed that new home sales in the West remain down 81 percent from peak levels. 

The first graph shows monthly new home sales totals for each month since 2003. Although growth moderated during the summer of 2013, it is still clear that overall, 2013 has been a more active year in new home sales than any other year since 2009. 

For the West region: 

Comparing monthly totals, August stats were down compared to 2012, but were up compared to 2010 and 2011.Obviously, however, sales activity remains well below levels reported prior to 2009.

The number of new homes for sale, on the other hand was up 20 percent, rising from 30,000 during August 2012 to 36,000 during August 2013. This reflect growth in new home production, which we know has increased throughout the region, including Colorado, in response to significant growth in home prices during the first half of 2013.  

As a final note, we can also look to the new home inventory. In this case, we calculate inventory by subtracting the number of new home sales in a given month from the number of new homes for sale at the end of the previous month. We see in the graph that the inventory bottomed out in 2012, but has come up a little over the past year. Inventory hit a 20-month high during August 2013, rising to 26,000 which was the highest reported since January 2012, when the level was 20,000 homes in the inventory. Nevertheless, inventory in new homes remains very low.