New home sales dipped in December but flew higher through 2012.
The report from the Commerce Department’s Census Bureau on December New Home Sales indicated a decline to 368,000 from November’s 398,000 at a Seasonally-Adjusted Annual Rate (SAAR). Economists had been expecting the total to reach 388,000. Because the totals for the three previous months were revised upward, the annual total for 2012 was estimated to be 367,000. Although there was a decline between November and December the total sales for 2012 rose 19.9 percent above the 2011 figure of 306,000. This was the most significant annual increase since 1983. Although that may sound impressive, the 2011 total was the lowest recorded since the Commerce Department began keeping track of this statistic in 1963. The second-lowest total was reached in 2010 and the 2012 amount was the third-lowest. Not surprisingly, the year with the fourth-lowest total was 2009.
Home prices increased by 13.9 percent from 2011 and the median price for a new home rose by 1.3 percent in December to $248,900.
There was a slight increase in the months of supply in December to 4.9 months compared with 4.5 months in November, although both figures were within the normal range, which is less than 6 months. Median Household Incomes: Down 0.5% in 2012
The estimated total of new homes for sale, including homes which have not yet been built, is 151,000. This is considered to be low. Warning: Dangerous Curves Ahead
From the report:
Sales of new single-family houses in December 2012 were at a seasonally adjusted annual rate of 369,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.3 percent (±15.3%)* below the revised November rate of 398,000, but is 8.8 percent (±24.8%)* above the December 2011 estimate of 339,000.
The median sales price of new houses sold in December 2012 was $248,900; the average sales price was $304,000. The seasonally adjusted estimate of new houses for sale at the end of December was 151,000. This represents a supply of 4.9 months at the current sales rate.
An estimated 367,000 new homes were sold in 2012. This is 19.9 percent (±4.8%) above the 2011 figure of 306,000.
The major ETFs expected to respond to the report on December New Home Sales are:
SPDR S&P Homebuilders ETF (NYSEARCA:XHB) +0.97%
iShares US Real Estate ETF (NYSEARCA:IYR) +0.41% Learn More About iShares ETFs
iShares Dow Jones Home Construction ETF (NYSEARCA:ITB) +1.68%
Vanguard REIT ETF (NYSEARCA:VNQ) +0.57%
PowerSharesDynamicBuilding and Construction ETF (NYSEARCA:PKB) +1.23%
Bottom line: Although new home sales declined during December, the nearly 20 percent increase between 2011 and 2012 was the most significant annual advance since 1983. Unfortunately the 2011 total was the lowest recorded since the Commerce Department began tracking this statistic.