New Home Sales Plunge 22.5% In April, 16.6% From Deep Negative Revisions

 

New home sales from census department, chart by Mish.

The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced the following new residential sales statistics for April 2022.

New Residential Construction Details 

• New Home Sales Sales of new single‐family houses in April 2022 were at a seasonally adjusted annual rate of 591,000.
• This is 16.6 percent below the revised March rate of 709,000 and is 26.9 percent below the April 2021 estimate of 809,000. 
• The median sales price of new houses sold in April 2022 was $450,600. The average sales price was $570,300.
• The seasonally‐adjusted estimate of new houses for sale at the end of April was 444,000. This represents a supply of 9.0 months at the current sales rate.  

I dispute the stated supply. It's not that high but I will cover that point in a follow-up post. 

Revision Notice

The Commerce Department put out this notice: "The seasonally adjusted estimates of housing units sold, housing units for sale, and the months' supply of new housing have been revised back to January 2017."

Sales Crash

The key idea is a crash in sales and it's much worse than reported after factoring in revisions. 

Last month, the census department reported 763.000 sales at a seasonally-adjusted annualized rate (SAAR). 

This month, the census department revised March down to 709,000 sales. From the original March report, sales fell 22.5%.

Consensus Forecast

The Bloomberg Econoday consensus was 750,000 in April, in a range of 700,000 to 780,000.

A rise to 780,000? Sheeesh!

I have no idea what some of these economists are smoking, but in all of the recent housing reports at least one of them has been ridiculously bullish. 

Negative Revisions

• March: 763.000 Down to 709,000
• February 835,000 down to 792,000
• December 871,000 down to 839,000

Sales Harbinger

NAHB data, chart and calculation by Mish

Yesterday, I commented NAR Pending Home Sales Data Provides More Evidence of a Severe Housing Slump

And on May 23, I noted The NAHB Wells Fargo Home Builder's Index Is Sinking Spectacularly

My sentiment chart is the difference between current conditions and expected conditions six months ahead. It's at record lows.

Builders, normally an optimistic group, sense disaster. 

Expect Negative Retail Sales Revisions 

While on the subject of revisions, on May 13, I commented Retail Sales Easily Beat Expectations, US Treasury Yields Jump in Response

I was really scratching my head over that until the following day when I commented Target Plunges 25%, What About Yesterday's Big Retail Sales Blowout?

The advance retail sales reports by the commerce department were stunning. Reports by Target and Walmart strongly suggest something else.

Walmart and Amazon both reported being overstaffed in the first quarter.

Expect negative revisions, pretty much everywhere.

https://mishtalk.com/economics/new-home-sales-plunge-22-5-in-april-16-6-from-deep-negative-revisions