|
Months of New Home Inventory (Seasonally
Adjusted)
| |
. |
|
|
 |
| MOST RECENT STATISTIC: |
8.1 |
|
|
| GRADE: |
F |
| PERIOD COVERED: |
Dec. 2009 |
| Date Released: |
01/27/10 |
|
|
|
| Next Release: |
02/24/10 |
|
|
|
|
|
| |
12/09 |
11/09 |
10/09 |
12/08 |
|
|
| New Home Inventory
(000) |
234* |
234* |
242* |
352* |
|
| Months of Supply |
8.1** |
7.6** |
7.1** |
11.2** |
|
| Months of Supply by
Stage of Completion |
|
|
|
|
|
| Completed |
3.4 |
3.3 |
3.1 |
5.5 |
|
| Under Construction |
3.5 |
3.4 |
3.1 |
4.4 |
|
| --Speculative (Compl.+U/C) |
6.9 |
6.7 |
6.2 |
9.9 |
|
| Not Started |
1.2 |
0.9 |
0.9 |
1.3 |
|
| TOTAL |
8.1 |
7.6 |
7.1 |
11.2 |
|
|
| Source:
Hanley Wood Market Intelligence |
Analysis for the Housing Market
By:Ken Lee
In December, new home inventories remained unchanged from the previous month at 234,000 units on a non-seasonally adjusted basis. The number of new homes for sale have not recorded a monthly increase since May 2007. Seasonally-adjusted inventory of unsold homes have declined for 32 straight months to 231,000 units. New home inventory levels are near all-time lows which has helped stabilize prices as demand has come more in line with supply. While declining sales activity remains a concern, lower levels of inventory will help the new home market stabilize sooner.
Months of inventory in December recorded increased for the second consecutive month. Seasonally adjusted months of new home inventory increased to 8.1 months from 7.6 months in November. After falling to its lowest levels since December 2006 in October, sharp drops in sales activity over the past two months have pushed months of inventory back up to its highest levels since June.
New Homes Data is subject to large sampling and statistical errors so it would not be unusual to see large revisions in the months to come.
*New Home Inventory Units are based on non-seasonally adjusted data in order to reflect the stages current inventory is in (not started, under construction, completed).
**Months of supply is a seasonally adjusted figure in order to accurately compare month over month data.
Definitions
and Importance for the Housing Market
By:Ken Lee
New home inventory is the number of new homes available for sale at any point in time. Because the housing market is very seasonal, we report and analyze seasonally adjusted information. Seasonally adjusted inventory figures allow the analyst to compare inventory levels for all months of the year.
New home inventory figures are closely watched by homebuilders and lenders. Slow sales and/or increases in construction can cause the months of inventory indicator to rise. A rise of only one month, from 4.0 to 5.0 months, for instance, can be very damaging to builders, given the sensitivity of construction interest payments on builder profit margins. A rise in inventory is also an early warning indicator that sales are slowing, competition is increasing, and price wars could begin.
We also report the months of inventory by stage of construction. Because the Census Bureau reports this detailed information only on a non-seasonally adjusted basis, we convert to seasonally adjusted by using the same percentage distribution reported by the Census Bureau on a non-seasonally adjusted basis.
New home inventory includes some units whose permits were multifamily. The sample excludes owner-built houses, contractor built houses, units built to be rented, and manufactured housing. Multifamily units are included if the units are side-by-side, have separately metered utilities, include a firewall, and were sold to a buyer.
Since the 1960s the Census Bureau has boosted new home sales data by 3.3% to take into account construction in areas where building permits are required without a building permit being issued. This type of construction would not normally be reported in the Census survey. The housing industry and trade groups believe that such unauthorized construction has virtually ceased, so the 3.3% boost was eliminated. This was not phased out over time, it was dropped completely in the revised estimates as of January 1999.
For more information on the Census Bureau's inventory statistics,
see:
http://www.census.gov/const/www/newressalesindex.html
Inventory information at the metropolitan level is available
in both the Executive Summary and Market Monitor reports at www.hwmarketintelligence.com.
Inventory information on specific projects is available in the Project
Profile reports at www.hwmarketintelligence.com
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