Today, in the Calculated Risk Real Estate Newsletter: New Home Sales increase to 763,000 Annual Rate in May
Brief excerpt: The next graph shows new home sales for 2022 and 2023 by month (Seasonally Adjusted Annual Rate). Sales in May 2023 were up 20.0% from May 2022. Year-to-date sales are down 4.7% compared to the same period in 2022.
As expected, new home sales were up year-over-year in May.
As previously discussed, the Census Bureau overestimates sales, and underestimates inventory when cancellation rates are rising, see: New Home Sales and Cancellations: Net vs Gross Sales. This has reversed now since cancellation rates have started to decline. When a previously cancelled home is resold, the home builder counts it as a sale, but the Census Bureau does not (since it was already counted).
[Rick Palacios Jr., Director of Research at John Burns Research and Consulting] told me that the builders have resold most of their previously cancelled homes.Yes on resold question. If that weren’t true we’d be seeing finished standing inventory still high, but it too is quickly falling in our survey & also below what builders (and we) consider normal. All part of why builders started stepping on the starts gas pedal last few months.There are still a large number of homes under construction, but in general, this is another positive report for new home sales. You can subscribe at https://calculatedrisk.substack.com/.