- by New Deal democrat
New home sales were updated for the second time since the shutdown, with data only through October - i.e., stale. The silver lining is that this is a long leading indicator, so it remains of value.
Normally I save inventory for last, but in view of the importance of new homes for sale (red in the linked graph below) in providing housing’s final pre-recession signal, here is that number compared with new houses sold (blue, right scale):
For sale inventory was unchanged month over month, and only up 1.7% YoY. As I wrote yesterday, once that has gone negative YoY, it has typically signaled the imminence of a recession. In that regard, if inventory simply has remains unchanged through December, it will have turned negative YoY.
The silver lining is that, like housing permits, actual single family home sales turned higher in September and October, down only -0.1% monthly in the latter month, but higher by 1.8% YoY suggesting that lower mortgage rates may be laying the groundwork for a recovery. As per usual, I caution that this series is very noisy and heavily revised.
Finally, as I typically note, prices follow sales with a lag, and that continued to be true as the median price for a new home was down -8.0% YoY:
Note that this series is not seasonally adjusted; hence the focus on the YoY change.
In short, much like housing permits, starts, and units under construction, this stale data looks very pre-recessionary, but also with some signs of “green shoots” thereafter.