New Home Sales are Slower than We Saw during 1976

New home sales a a vital part of our economy. New home sales generate other types of sales. New homes need new appliances, furniture, electronics, garden supplies, and carpeting. The new home construction data was released for August last week. The new construction data was weak. We need strong construction data to generate strong sales data. The only bright part of this report was the average sales price - unless you actually want to buy a home.

We Saw 50,000 New Homes Sold during August - The Same as August 1983. We are seeing sales increase for the seventh straight August. That is what you might hear elsewhere if they are not talking about the debates or the shooting du jour. This is 8% lower than what we saw during August 2008 as the economy was cooling. This is less than half of what was sold during August of 2003 or August 2005. The last time prior to the recession and current recovery the lowest level of August New Home Sales of 50,000 units was during August of 1992 when the sales were higher at 56,000. The average sales price of $353,600 was lower than the $356,200 recorded during August of 2014.

We are on pace for a total sales volume slower than 1976. 1983, 2008.  If you examine the trend line for the current year data  we are roughly at a pace comparable to 1975 or 1980. We are not on track for over 600,000 units. The official number says that we are on track for 609,000 units. Last month's track number was revised to 659,000. The July data was revised down to 579,000 and the June data was revised down to 566,000.

The Rolling Year Data Shows we are at a Slower Pace than 1976, 1983, 1992 or 2008. If you compare where we are during August as to where we were during August of 1992 or August of 2008 we are selling new homes at a slower pace than 1992 or 2008. The sales during 1992 were in a warming market. The data from 2008 was during a cooling market. Is this a warming market or a cooling market?Whatever the answer is, we are not in expansion mode. We are in recovery mode.

The Devil is in the Revisions. The data for the average sales price during May was revised up to $350,000. The problem is that the advance value was 358,900, which was revised down to $351,400 and down to $349,300. Somehow the median sales price was revised up to $296,000.

The New Home units sold during May and July were unchanged. The June data was revised down from 55,00 units to 52,000 units. What is interesting regarding the data is that the May seasonally adjusted data was revised down from 572,000 to 566,000 and the June data was revised from 582,000 to 579,000. Somehow the July data was revised up, seasonally adjusted to 659,00 units while the non-seasonally adjusted data was unchanged.

Does anybody check the FACTs? FACTs are False Assertions Considered to be True. If you were to assess this report based upon what was broadcast today you might think that the report was not released today. What everybody has to understand is that if we are not moving forward then we are stalling or moving backward. If we are not building new homes we are not selling new items to be placed in those homes.