US Nov new home sales fell 2.4 pct

Biz.Yahoo/Reuters ^ | December 24, 2003

[Starwind]

US Nov new home sales fell 2.4 pct
Wednesday December 24, 10:00 am ET

   WASHINGTON, Dec 24 (Reuters) - U.S. Commerce Department
reported sales of new single-family homes, seasonally adjusted,
with percent changes from prior month (numbers in 1,000s).
.             Pct   Nov    Oct  (Prev)    Sep    (Prev)    Nov'02
Total Units  -2.4 1,082  1,109   1,105  1,137     1,145     1,022
 By Region:   Pct   Nov    Oct  (Prev)    Sep    (Prev)       
  Northeast  -6.5    72     77      87     86        90       
  Midwest   -10.1   179    199     203    196       204       
  South       0.4   518    516     516    519       521       
  West       -1.3   313    317     299    336       330       
Total November sales of new single-family homes rose 5.9
percent from November 2002.
.  In 1,000s:        Nov    Oct (Prev)    Sep (Prev)
Actual Units Sold     75     84     84     91     92
Sales Prices:                                    
  Mean             274.4  244.0  250.2  255.1  253.7
  Median           209.2  189.2  190.9  190.9  189.9
Note-Actual number of new single-family units sold is not
seasonally adjusted.
Monthly percent changes of total sales, seasonally adjusted,
from prior months as follows:
.                Oct (Prev)    Sep (Prev)    Aug (Prev)
Total Units     -2.5   -3.5   -4.5   -1.9    3.9    1.9
Number of Months:       Nov    Oct (Prev)    Sep (Prev)
 Supply of Homes        4.1    4.0   4.0     3.7    3.7
1,000 units:            Nov    Oct (Prev)    Sep (Prev)
 End-Month Inventory    363    358    360    347    345
 FORECAST:
 Reuters survey of economists forecast:
 U.S. Nov new home sales annual rate of 1.120 million units

[Starwind]

The Negative Nancys just want to pretend that everything is awful, when it's up from last year.

Yes, at the moment new home sales are a little higher year-over-year, but they have fallen a lot and continue to fall. Likewise new construction permits fell off 5.4% in November ( see U.S. Nov housing starts rose 4.5 pct) so future new home sales will be further down as well.

But new home sales contribute a small part of the stimulus that the economy received. Re-fi's contributed the larger part, and are lower than they were last year.

New home sales are declining, arguably cyclical, but none the less declining. (Note when comparing to the Commerce Dept reported figures, the seasonally adjusted data on the curve seem to be in the right ballpark, whereas something is amiss in the scale of non-seasonally adjusted data in the graph data set from economagic)

But that is new home sales only, and represents a small fraction of the total home sales. Below is the index for total mortgage originations up to Aug of 2003. Compare the last bar with the most recent MBAA report for Dec 19 week. Wherein:

The Market Composite Index of mortgage loan applications - a measure of mortgage loan applications for purchases and refinancings - decreased by 6.8 percent to 631.2 on a seasonally adjusted basis from 677.2 one week earlier.

On an unadjusted basis, the Index decreased by 7.7 percent compared with last week and was down 34.7 percent compared with the same week one year earlier.

Note that the overall index for Dec 19th week is lower than it was in Aug 2003.

In the table below, taken from Mortgage Originations: Total, Purchase, and Refinance Quarterly, 1990 to present note that the prepronderance of mortages have been re-fi's by about 71% or about $537B re-fi versus $220B home purchase. The bulk of that re-fi money is what has been stimulating the economy along with tax cuts.

Mortgage Originations: Total, Purchase, and Refinance Quarterly, 1990 to present
	Mortgage Originations (Bil. $)	Refinance Share (%)	Refinance Originations (Bil. $)	Purchase Originations (Bil. $)
1990. Q1	115.789	19	22.000	93.789
1990. Q2	122.639	13	15.943	106.696
1990. Q3	120.050	13	15.607	104.444
1990. Q4	99.926	16	15.988	83.938
1991. Q1	105.840	30	31.752	74.088
1991. Q2	135.555	26	35.244	100.311
1991. Q3	151.889	21	31.897	119.992
1991. Q4	168.790	46	77.643	91.147
1992. Q1	225.490	59	133.039	92.451
1992. Q2	215.052	33	70.967	144.085
1992. Q3	219.823	47	103.317	116.506
1992. Q4	233.316	49	114.325	118.991
1993. Q1	189.511	42	79.595	109.916
1993. Q2	248.489	53	131.699	116.790
1993. Q3	289.747	51	147.771	141.976
1993. Q4	292.114	60	175.268	116.846
1994. Q1	261.521	48	125.530	135.991
1994. Q2	214.311	23	49.292	165.019
1994. Q3	157.342	13	20.454	136.888
1994. Q4	135.574	12	16.269	119.305
1995. Q1	119.314	11	13.125	106.189
1995. Q2	140.523	13	18.268	122.255
1995. Q3	189.767	27	51.237	138.530
1995. Q4	189.832	33	62.645	127.187
1996. Q1	194.196	48	93.214	100.982
1996. Q2	209.140	26	54.376	154.764
1996. Q3	190.632	17	32.407	158.225
1996. Q4	191.265	24	45.904	145.361
1997. Q1	173.744	29	50.386	123.358
1997. Q2	196.302	21	41.223	155.079
1997. Q3	222.168	27	59.985	162.183
1997. Q4	241.431	38	91.744	149.687
1998. Q1	301	53	160	141
1998. Q2	379	44	167	212
1998. Q3	382	44	168	214
1998. Q4	445	59	263	182
1999. Q1	350	54	189	161
1999. Q2	381	38	145	236
1999. Q3	309	23	71	238
1999. Q4	244	22	54	190
2000. Q1	200	21	42	158
2000. Q2	276	15	41	235
2000. Q3	286	17	49	237
2000. Q4	262	25	66	197
2001. Q1	396	55	218	178
2001. Q2	501	50	251	251
2001. Q3	453	45	204	249
2001. Q4	680	70	476	204
2002. Q1	507	60	304	203
2002. Q2	508	43	218	290
2002. Q3	694	60	416	278
2002. Q4	774	69	534	240
2003. Q1	757	71	537	220
Source: Housing and Urban Development (1990-1997); Mortgage Bankers Association of America estimates (1998-)

But the re-fi's are now declining as are new sales. That money is no longer 'pumping' the economy. That is what the concern is about.

[Miss Marple]

Well, Mr. Expert, Don Evans has never been at Treasury. He is the Secretary of Commerce.

Perhaps you are thinking of O'Neill. Of course, if you can't even tell the players, excuse me if I look a little skeptically at your opinion.

[Starwind]

Perhaps you are thinking of O'Neill. Of course, if you can't even tell the players, excuse me if I look a little skeptically at your opinion.

You're right. I meant O'Neill. Be as skeptical as you like.

[sarcasm]

Banks feel the pinch as refinancing winds down

< SNIP >

The other legacy of the refinancing boom is that banks have millions of loans locked in at low rates. Many banks sell loans to other banks or mortgage companies soon after closing on the mortgage with a customer, so they benefit from the fees the customer paid but aren't left with the loan on the books when interest rates begin moving upward.

Those that haven't will be "trying to get them off their books, selling them and getting higher-rate loans in," McCune said. In some cases, banks may sell the loans at a loss.

[Liberty Valance]

uh-oh