New Home Sales Up 5.5% in November. Median Prices Improve

The U.S. Census Bureau and the Department of Housing and Urban Development have jointly released NEW RESIDENTIAL SALES for November 2010.

The survey is primarily based on a sample of houses selected from building permits. Since a "sale" is defined as a deposit taken or sales agreement signed, this can occur prior to a permit being issued. Changes in sales price data reflect changes in the distribution of houses by region, size, etc., as well as changes in the prices of houses with identical characteristics. It takes four months to establish a trend of new home purchases.

New Home Sales  rose to an annualized rate of 290,000.  This is better than the previous month (275,000) but a bit short of the consensus of 300,000.  Still...  Not outside a reasonable deviation.  Geographical discrepancies were highly divergent!  Way down in the northeast and way up in the west.  Median Sales Prices thankfully rose to get back in line with a previous trend, but remain down -2.7% year over year. 

Reuters Quick Recap:

RTRS -  SINGLE-FAMILY HOME SALES 290,000 UNIT ANN. RATE (CONS 300,000) VS OCT 275,000 (PREV 283,000)

RTRS -  SINGLE-FAMILY HOME SALES +5.5 PCT VS OCT -10.7 PCT (PREV -8.1 PCT)

RTRS -  HOME SALES NORTHEAST -26.7 PCT, MIDWEST -13.2 PCT, SOUTH +5.8 PCT, WEST +37.3 PCT

RTRS -  NEW HOME SUPPLY 8.2 MONTHS' WORTH AT CURRENT PACE VS OCT 8.8 MONTHS

RTRS -  MEDIAN SALE PRICE $213,000, -2.7 PCT FROM NOV 2009 ($218,800)

RTRS-  HOMES FOR SALE AT END OF NOV 197,000 UNITS.  LOWEST SINCE MARCH 1968, VS OCT 201,000 UNITS

Excerpts from the Release...

Sales of new single-family houses in November 2010 were at a seasonally adjusted annual rate of 290,000. This is 5.5 percent (±16.2%)* above the revised October rate of 275,000, but is 21.2 percent (±13.3%) below the November 2009 estimate of 368,000.

The median sales price of new houses sold in November 2010 was $213,000; the average sales price was $268,700. The seasonally adjusted estimate of new houses for sale at the end of November was 197,000. This represents a supply of 8.2 months at the current sales rate.

Technicals are everywhere and aren't limited to MBS and financial markets.  Econ data can be highly technical and importantly so, considering technicals are a proxy for underlying psychology.  Note the trend that we've been in since 2009 and that last report fell way short of that.  As hoped, that proved to be an outlier as median prices rose back in line with the trend on this month's report. We'll call that a modest "recovery" for now.

The one positive we see is new homes inventory is near a record low so it won't be hard to knock inventory down quickly when demand picks up. The decline in home prices was a bit startling last month but we're dealing with seasonal distortions, foreclosure moratoriums and the expectation that shadow inventory will eventually push home prices even lower. Maybe we're already seeing that play out in the housing market. Qualified buyers are in control....