New Home Sales Badly Miss Expectations

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by Mish Shedlock, The Maven:

New home sales rose 1.3% in November but only because of huge downward revisions.

Revision Mirage

The Census Bureau’s New Residential Sales Report shows sales rose 1.3% in November to a Seasonally-Adjusted-Annualized-Rate (SAAR) of 719,000 units but it’s a revision mirage.

Last month the report showed 733,000 sales but the Census Department revised October down to 710,000 units.

The Econoday consensus was a slight gain to 735,000 units so this was a bad two-month miss.

Nonetheless, figures over 700,000 are at the top end of the sales range since 2007.

Long Term Trends

Bulls will point out huge year-over-year advances. But that is against dismal October and November sales of 557,000 units and 615,000 units respectively.

Another easy year-over-year-comparison is coming up. December 2018 had 546,000 sales.

The long-term picture though still shows a depressed setup, especially in light of population growth.

New Home Sales by Region – Seasonally Adjusted

The Northeast had a whopping 52.5% increase in sales on a seasonally-adjusted basis. But a closer look at the numbers show it’s meaningless.

New Home Sales by Region – Unadjusted

On an unadjusted basis, people bought 55K homes in July, 57K home in August, 56K in September, 55K in October, and 52K in November.

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