New Home Sales Tank

From CNBC:

US new home sales drop to near one-year low

New U.S. single-family home sales fell to near a one-year low in September after two straight months of gains, suggesting a temporary cooling in the market for new houses.

The Commerce Department said on Monday sales dropped 11.5 percent to a seasonally adjusted annual rate of 468,000 units, the lowest level since November 2014. August’s sales pace was revised down to 529,000 units from the previously reported 552,000 units.

Economists polled by Reuters had forecast new home sales, which account for 7.8 percent of the market, slipping to a rate of 550,000 units. Sales were up 2.0 percent compared to September of last year.

The moderation in new home sales is likely to be temporary as other housing reports have painted an upbeat picture of the sector. In addition, new home sales tend to be volatile month to month because they are drawn from a small sample.

New home sales tumbled 61.8 percent in the Northeast to the lowest level since April. Sales declined 6.7 percent in the West and were down 8.7 percent in the populous South. In the Midwest, sales fell 8.3 percent.

With sales weak, the stock of new houses for sale increased 4.2 percent to 225,000 last month, the highest level since March 2010. Still, supply remains less than half of what it was at the height of the housing boom.

At September’s sales pace it would take 5.8 months to clear the supply of houses on the market, up from 4.9 months in August. The median price of a new home rose 13.5 percent from a year ago to $296,900.

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43 Responses to New Home Sales Tank

  1. Juice Box says:

    New home sales are still half what they were during the bubble.

  2. Juice Box says:

    Here is the chart they should be putting up.

  3. grim says:

    Yeah, but a new home is not a consumable. Housing being built at peak could be considered oversupply, which would need to be worked off. If we were still building 600k homes into an oversupply situation, wouldn’t that be a negative compared to pulling back the build rate to something closer to owner-occupant (non-investor) demand, even if that number is lower than the average run rate?

    We were building 2-3x the number of homes in the peak years compared to what would look like a natural long run rate of about 500-600k. We probably could have gone near zero and not ran out of housing stock.

  4. grim says:

    The other really interesting think about that chart is that it supports the argument that investor demand shifted from equities into real estate following the dot com bust. Backyard traders became backyard real estate investors, with all the same rigor and due diligence. IMHO – I personally believe this was a necessary pre-condition of the bubble. Money started to move from equities into real-estate pre-bust, which created quite a bit of real estate buzz, upward movement of pricing. Once the bubble burst, money began flowing in even faster. I think that lit the fire and created the necessary perception.

    That’s just my 2 cents.

  5. D-FENS says:

    I find it sad that Mexico seems to do a better job at hurricane response than the Northeast US. Whatever happened to hurricane Patricia, the worst hurricane in recorded history? It was almost a non event.

  6. grim says:

    I thought it pretty much fell apart as quick as it formed.

  7. yome says:

    Concrete homes are much easier to clean when flooded. Take a hose wash and done. In the US,the wood,insulation and sheet rock needs to be ripped away once wet.Most homes in the world are made of concrete. They withstand earthquake and flooding if done right

  8. leftwing says:

    New Home Sales Tank
    Posted on October 27, 2015 by grim

    Home Prices continue to hit new highs
    Posted on October 26, 2015 by grim

    Go figure.

  9. yome says:

    VIENNA, Austria — Think of the words social housing project. What comes to mind?
    Do you envision lush parks, tennis courts, indoor and outdoor swimming pools, and saunas? Probably not. But Austrians do.
    In the United States, inner-city residents often strive to escape “the projects.” In Austria, they’re where people want to escape to.
    About 3 in 5 residents of Austria’s capital Vienna, rich and poor, live in a “Gemeindebau” — public housing provided and managed entirely by the city — as well as other subsidized social housing typically run by nonprofit associations.
    “Vienna has always said that it doesn’t want ghettos. Today, there is not one area where you wouldn’t dare to go. There’s a social balance throughout the districts, and a high quality of life, peace and security,” says Christiane Daxbock from the office of the city counselor for housing. And residents agree.
    “The reason for that is mostly found in social housing,” she says.

  10. leftwing says:


    Nice chart. Noticeable:

    A pullback in new home sales preceded 6 of seven recessions.

    Coming out of each recession the market added about 400k new home sales.

    Would be interesting to overlay interest rates on that chart. Me guesses this is the first time sales are increasing post-recession without a decrease in rates. Combined with grim’s comments above does not bode well.

  11. leftwing says:

    hahaha. can actually overlay. put the 10yr on the chart. its rate has declined during the recent increase in units.

    will be interesting to see how this plays out.

  12. leftwing says:

    “The reason for that is mostly found in social housing,” she says.

    The reason is that Austria is one of the most homogenous populations in the developed world.

    It is easy to support a brother. It is harder to support someone different than you who is screaming with spittle flying in your face that your hard work is the source of all his problems.

    Don’t confuse cause and effect.

  13. yome says:

    MORE OIL COMING TO MARKET- Who is a oil bull?

    The U.S. plans to sell millions of barrels of crude oil from its Strategic Petroleum Reserve from 2018 until 2025 under a budget deal reached on Monday night by the White House and top lawmakers from both parties.
    The proposed sale, included in a bill posted on the White House website, equates to more than 8 percent of the 695 million barrels of reserves, held in four sites along the Gulf of Mexico coast. Sales are due to start in 2018 at an annual rate of 5 million barrels, rising to 10 million by 2023 and totaling 58 million barrels by the end of the period. The proceeds will be “deposited into the general fund of the Treasury,” according to the bill.
    The sale is the second time the U.S. has raised cash from the reserve, created as a counter-balance to the power of Arab producers after the first oil crisis of 1973-74. The U.S. may sell also additional barrels to cover a $2 billion program from 2017 to 2020 to modernize the strategic reserve, including building new pipelines.
    The White House on Tuesday urged lawmakers to support the budget deal, including the proposed partial sale of the SPR, saying it was “a responsible agreement that is paid for in a balanced way.”

  14. Libturd in Union says:

    Joyce will like this story.

    WSJ: Goldman in talks on $50 million fine over release of N.Y. Fed secrets

  15. Libturd in Union says:

    Patricia hit where there was no population. I’ve been to Manzanillo, which is essentially the main shipping port to Mexico City on the Pacific. It’s really a nothing of a city. Maybe 100K people. That is the major metro where the storm came the closest to. Puerto Vallarta was far enough north to be spared the surge and the worst of the winds. And like Grim said, she fell apart rapidly at landfall. So Mexico ran into a lot of “bueno suerte” with Patricia.

  16. FKA 2010 Buyer says:

    No Longer a Niche, Consumer-Direct Lenders Lead Mortgage Innovation

    It wasn’t long ago that the consumer-direct mortgage channel was a novelty catering to a niche segment of technology aficionados and refinance borrowers. But as consumers have increasingly embraced all manners of electronic commerce, these online lenders have seized on growing expectations for a digitally-focused and interactive experience to firmly establish their place in the industry.

    In that context, the naming of Quicken Loans CEO Bill Emerson as chairman of the Mortgage Bankers Association, serves as a (possibly overdue) acknowledgment that the digital channel is transforming the mortgage business, albeit not as rapidly as it has some other retail financial services.

    Quicken’s tech-savvy approach to mortgage lending will no doubt influence Emerson’s work as a spokesman and advocate for the entire industry.

    Now, experts say several market factors — including the shift to purchase-driven originations, the growing number of millennial buyers, and new, complex regulations that demand increased technology adoption to maintain compliance — may create a perfect storm for digitally-focused lenders.

  17. Libturd in Union says:


    Nothing like selling a commodity at it’s lowest price in a decade and at a third of peak. Go government!

  18. FKA 2010 Buyer says:

    The fat guy should put together a plan to bring Apple to NJ. have plenty of space

    When Apple Employees Move In, Housing Prices Go Up

    In 2010, the difference between the price of the median Apple worker’s home and the median San Franciscan’s home was about $150,000 in 2010. This year, it is close to $400,000. The Journal only studied this phenomenon for Apple employees because running the same analysis for other companies was too resource-intensive. Apple’s employees obviously aren’t singlehandedly responsible for these changes, but they are emblematic of other tech companies’ workers’ presence in the city.

    The median household income in San Francisco County is $75,604, but according to one report, tech workers in the Bay Area have a median wage of over $123,000. The tech industry has been credited for 30 percent of the San Francisco’s job growth since 2010, with tech employees making up an estimated 8 percent of workers in the city in 2013.

  19. Juice Box says:

    A wood house in Mexico would be like candy to the termites, they use concrete block or bricks with skim coat of cement, Hurricane proof, bug proof, fire proof and the bonus bullet proof, if you have been following the Syrian conflict concrete homes are still standing and don’t burn down. A house made of concrete can take a beating, just take a look at jails in the USA or heck government housing, similar construction is used.

  20. FKA 2010 Buyer says:

    BTW – Congrats Grim on the license

  21. Libturd in Union says:

    BTW, the 1 to 2 inches of rain we will get tomorrow is Patricia remnants.

  22. grim says:

    reminds me I need to blow out the gutters

  23. Libturd in Union says:

    There’s a small chance we’ll get three inches and a minor chance at some tornados. After the rain, Thursday would be a good time to put down the Fall fertilizer. Will be early enough to allot enough time before the less important Winter application.

  24. grim says:

    Tornados? So I don’t need to blow out my gutters?

  25. walking bye says:

    Grim now that you are in manufacturing remember the old saying..
    “keep your gutters clean” “keep your gutters clean”

  26. Fast Eddie says:

    So I don’t need to blow out my gutters?

    As JJ would tell you, it’s vital that you blow out your gutters on a regular basis.

  27. D-FENS says:

    @Breaking911: Shotguns ‘Sold Out’ In Austria As People Buy Arms Amid Fears Of Influx Of Migrants –

  28. phoenix1 says:

    For Joyce,
    This guy was good.
    I love the part when he told her she was going to need a driver “re-exam” and she doubled up on her earlier verbal assault.
    School zones, buses, etc- you have to be extra careful. Unless you have frozen friskies from target…..

  29. D-FENS says:

    Alan Gottlieb, executive vice president of the Second Amendment Foundation, said he recently returned from a gun rights event in Europe, where he sensed a change in attitude toward firearms.

    “I just returned from a gun rights meeting in Belgium, and I can attest that all over Europe people now want the means to defend themselves,” Gottlieb told WND. “Self-defense is no longer a dirty word. In countries like Austria, where it is still legal to own a firearm, gun sales are at record levels. I can tell you first-hand that people in Europe now wish they had a Second Amendment.”

    The Czech TV station then reported that Islamists are promising: “We will cut the heads off unbelieving dogs even in Europe.”

    “Look forward to it, it’s coming soon!” the Czech newscaster said.

    ISIS-trained jihadists are now returning as European citizens or they are trying to infiltrate as migrants. In one propaganda video an ISIS operative informs his comrades back home in Germany to slit the throats of unbelievers in Germany, Czech TV reports.

    “Overall, the ministry of interior stated that Germany is in the cross-hairs of Islamic terrorists but that he does not have any indications of specific threats,” he said.


  30. phoenix1 says:

    27. Looks like that girl schooled the school.
    Wonder which individuals get to pay the tab for this……

  31. chicagofinance says:

    this guy received a penalty stroke for a golf ball in contact with his body…

  32. D-FENS says:

    33 – Water vapor will be the next pollutant.

  33. grim says:

    Where do we drill wells for the Hydrogen?

  34. grim says:

    Oooohh, from FRACKING!

    I love it.

  35. yome says:

    Efficient way of turning plastic to diesel fuel is here too

  36. Essex says:

    Congrats Gary — terrific interest rate. Now you can leave here feet first.

    This is an oddly addictive place, New Jersey. I do have my issues though with doubling down on the place — essentially betting the farm here. Yet, it now looks as if the budget has stretched to something north of $750+ k. Yep. That’d get you something really nice in 90% of the US. Here? I dunno.

  37. A Home Buyer says:

    39 –

    Assuming you pay for the house in cash, yes, you could get an amazing house for that price anywhere in the US. Borrowing 600K would be a Financial Death Sentence in the back woods of Pennsatucky though…. no way to support in most circumstances.

    New Jersey is the type of place you make your fortune in as quickly as possible and then immediately flee with that capital… or risk becoming a “lifer” forever trapped by “Blue Ribbon Districts” and “Proximity to the City”, all the while be-groaning the taxes, high cost of living, obvious corruption, and other graft rampant throughout the system.

    Oh, and then you start praying you or your loved ones aren’t executed by either the politically sanctioned gangsters or other illegal criminal elements found in the state.

    But I’m not biased.

  38. grim says:

    Grilled up a Burger this evening, topped with Taylor Ham, Bacon, and Cheese.

  39. Libturd in Union says:

    And you are still alive?

  40. Grim says:

    My colon thanked me.

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