Housing numbers......
Today’s release of New Home Sales brings about the usual euphoria (in the media at least) as they were up a whooping 11% at 384k houses, against the expected 350k.
34,000 houses are a lot of houses????? Well, we’re not actually talking about 34,000 houses, because this is a seasonally adjusted, annualized number - so without knowing what the seasonal adjustment is - the annualized part we can work out and in effect we’re getting excited because of less than 3,000 extra new houses sold in one month!
I read recently that there are 15-18 mill ‘vacant’ homes (as the Americans call them) in the US - these are either, newly constructed, repossessed, for sale, in the shadow inventory (banks hold back repossessed houses as not to flood the market), second homes, vacation homes etc, which all would come to the market should it improve.
Household formation is currently negative in the US according to Sanford Bernstein (that must be a first?) as kids are moving back in with their parents, at a faster rate than net immigration creates demand for houses. Clearly the kids will want to move out again at some stage, but for now the housing situation is getting worse, not better.
3,000 doesn’t really cut it, does it now?
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