Friday, May 2, 2014

New Home Sales in US West Down From 2013 Levels

New single-family home sales in the U.S. West were down 27 percent from March 2013 to March 2014, coming in at 8,000 new homes for March 2014, and marked the third 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 much of 2012 and 2013, but began to moderate during late 2013 and have turned negative in recent months.

The report, which monitors sales activity for newly constructed houses, showed that new home sales in the West remain down 78 percent from peak levels. 

The first graph shows monthly new home sales totals for each month since 2003. While still up from 2010 and 2011 levels, 2014 totals so far show no signs of outpacing 2013. 

In the second graph, we see the year-over-change for each month, and it is clear that growth rates have come down considerable since 2012 and early 2013. The last three months are negative growth rates, and growth rates have been negative during 7 of the last 9 months. 

A month-by-month look at the West region: 

Comparing monthly totals, we find that the first 3 months of 2013 were rather robust compared to the previous year, but for the same period this year, all months are down. In March especially, totals were nothing remarkable and were even down from 2010 levels.

The number of new homes for sale, on the other hand was up 43 percent, rising from 30,000 during August 2012 to 30,000 during March 2013. to 43,000 during March 2014. This reflects growth in new home production, which we know has increased throughout the region, including Colorado, in response to significant growth in home prices during 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 was tied at a 38-month high during March 2013, rising to 34,000 which was the highest reported since February 2011.