Declines in 7 of 20 largest states not good.

Sure feels to me like this cycle is over:

MBA Purchase Applications

In any case it’s still very low, and with both mortgage purchase apps down and cash buyers down total housing sales are unlikely to rise.

Also note new home sales are booked at signing, while existing home sales are booked at closing, so these are sales that will hopefully close about 90 days from now:

New Home Sales

Highlights
In a report that is frequently volatile, new home sales surged 18.0 percent in August to a much higher-than-expected annual rate of 504,000. To underscore the volatility, the high-end Econoday forecast was 465,000!

Low supply has been a stubborn problem holding down both sales of new homes and existing homes, and the surge in August sales has made this problem more pronounced. Supply of new homes at the current sales rate fell in August to 4.6 months from 5.6 months in the prior month. Builders will likely be scrambling to bring new homes onto the market which in August totaled 203,000 units vs 201,000 in July.

Prices may no longer be holding down sales, falling 1.6 percent on the median in the month to $275,600. Year-on-year, the median was up 8.0 percent in August which sounds high but not against the 33.0 percent gain in sales.

Looking regionally at sales, sales surged 50.0 percent in the West followed by a 29.2 percent gain in the East. In the South, where more new homes are sold than all other regions combined, sales rose 7.8 percent.

This report is a reminder of the home builders’ housing market index where the traffic component, which had been lagging badly, is suddenly surging. But whether the strength in today’s report can be extended and whether August’s gain will be revised downward are uncertain. Note that revisions to this series are often as volatile as any single month’s headline.

Sales were up but remain at historically low levels:

U.S. Architecture Billings Index falls in August

Sept 24 (Reuters) — The Architecture Billings Index, an indicator of U.S. non-residential building activity, fell slightly in August, after hitting a seven-year high the previous month.

The ABI stood at 53.0 in August, down from 55.8 in July, the American Institute of Architects said on Wednesday.

The index, based on a survey of U.S. architects, reflects the roughly nine to 12 months between architecture billings andconstruction spending.

A reading above 50 indicates an increase in billings.

The new projects inquiry index was 62.6, following a very strong mark of 66.0 the previous month.

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As previously discussed, with mtg purchase apps down 10% from last year, and the % of cash buyers down as well, it’s hard to see how total sales can be anything but lower?

Existing Home Sales

Highlights
In the latest disappointment out of the housing sector, existing home sales fell back 1.8 percent in August to a lower-than-expected annual rate of 5.05 million vs the Econoday consensus for 5.18 million. Year-on-year, sales are down 5.3 percent, a bit more steep than minus 4.5 percent in the prior month.

Limited supply has been a major factor holding down sales with supply on the market falling 40,000 homes in the month to 2.31 million. Supply relative to sales, at 5.5 months, held unchanged reflecting August’s sales dip.

Prices have been flat the last six months, down 0.8 percent in August to a median $219,800. Year-on-year, the median is little changed at plus 4.8 percent.

Looking at regional sales data, August’s weakness was centered in the West, down 6.0 percent, followed by the largest housing region which is the South, down 4.2 percent. The Northeast, which is the smallest region, shows a 4.7 percent gain with the Midwest up 2.5 percent.

Calculated Risk

The NAR reports:Existing-Home Sales Slightly Lose Momentum in August as Investor Activity Declines

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 1.8 percent to a seasonally adjusted annual rate of 5.05 million in August from a slight downwardly-revised 5.14 million in July. Sales are at the second-highest pace of 2014, but remain 5.3 percent below the 5.33 million-unit level from last August, which was also the second-highest sales level of 2013. …

Total housing inventory at the end of August declined 1.7 percent to 2.31 million existing homes available for sale, which represents a 5.5-month supply at the current sales pace. However, unsold inventory is 4.5 percent higher than a year ago, when there were 2.21 million existing homes available for sale.

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The Chicago Fed index was reported down a lot, and last month revised lower as well, but you pretty much only hear about this one when it goes up…

Highlights
A drop in production pulled down the national activity index in August, which came in at minus 0.21 from a revised plus 0.26 in July. The 3-month average is at plus 0.07 vs July’s revised plus 0.20.

The big negative in August was the 0.4 percent decline in the manufacturing component of the industrial production report, one that was likely skewed lower by timing issues for auto retooling. Consumption & housing also pulled down the main index, at minus 0.12 from July’s minus 0.13.

The employment component fell to zero from July’s plus 0.10 reflecting weak nonfarm payroll growth of 142,000. The component that had the best showing in August was sales/orders/inventories, at plus 0.08 vs plus 0.04 in July.