by Calculated Risk on 2/24/2012 10:00:00 AM

The Census Bureau reports New Home Sales in January were at a seasonally adjusted annual rate (SAAR) of 321 thousand. This was down from a revised 324 thousand in December (revised up from 307 thousand).

The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

Sales of new single-family houses in January 2011 were at a seasonally adjusted annual rate of 321,000. This is below the revised December rate of 324,000 and is 3.5 percent above the January 2011 estimate of 310,000.

Click on graph for larger image.

The second graph shows New Home Months of Supply.

Months of supply decreased to 5.6 in January. This is the lowest level since January 2006.

The all time record was 12.1 months of supply in January 2009.

This is now normal (less than 6 months supply is normal).

The seasonally adjusted estimate of new houses for sale at the end of January was 151,000. This represents a supply of 5.6 months at the current sales rate.

On inventory, according to the Census Bureau:

"A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted."

Starting in 1973 the Census Bureau broke this down into three categories: Not Started, Under Construction, and Completed.

This graph shows the three categories of inventory starting in 1973.

The inventory of completed homes for sale was at 57,000 units in January. The combined total of completed and under construction is at the lowest level since this series started.

The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).

In January 2012 (red column), 22 thousand new homes were sold (NSA). This was the second weakest January since this data has been tracked. The record low for January was 21 thousand set in 2011. The high for January was 92 thousand in 2005.

This was above the consensus forecast of 315 thousand, and sales for October, November and December were revised up.

It appears New Home sales have started to slowly increase. I'll have more later.