by Calculated Risk on 8/25/2014 10:00:00 AM

The Census Bureau reports New Home Sales in July were at a seasonally adjusted annual rate (SAAR) of 412 thousand.

June sales were revised up from 406 thousand to 422 thousand, and May sales were revised up from 442 thousand to 454 thousand.

"Sales of new single-family houses in July 2014 were at a seasonally adjusted annual rate of 412,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.4 percent below the revised June rate of 422,000, but is 12.3 percent above the July 2013 estimate of 367,000."

Click on graph for larger image.

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

Even with the increase in sales over the previous two years, new home sales are still close to the bottom for previous recessions.

The second graph shows New Home Months of Supply.

The months of supply increased in July to 6.0 months from 5.6 months in June.

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

This is now at the top of the normal range (less than 6 months supply is normal).

"The seasonally adjusted estimate of new houses for sale at the end of July was 205,000. This represents a supply of 6.0 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.

The third graph shows the three categories of inventory starting in 1973.

The inventory of completed homes for sale is still low, and the combined total of completed and under construction is also low.

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

In July 2014 (red column), 37 thousand new homes were sold (NSA). Last year 33 thousand homes were also sold in July. The high for July was 117 thousand in 2005, and the low for July was 26 thousand in 2010.

This was below expectations of 425,000 sales in July, and sales were up 12.3% year-over-year.

I'll have more later today .