Update: Surprise: A pop in new home sales
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News item from Reuters via CNBC: ‘Sales of new single-family U.S. homes rose 4.8 percent in September but sales in August were revised down sharply, painting a mixed picture of the battered housing sector.’
Update: This roundup of comment from economists at the Wall Street Journal contains a common theme -- one already epxressed by commenters here -- that these numbers are not particularly reliable or useful. Bear Stearns observes: ‘The size of the downward revisions to the prior two months’ home sales data and the failure of the Commerce Department to track cancellations makes this series of very limited usefulness in tracking trends in the housing market. As a result, we would not read anything into the small increase in new home sales reported for September. Most housing data suggest that the sector continued to contract in September.’
More from Reuters: ‘New single-family home sales set an annual rate of 770,000 units in September, up from a downwardly revised rate of 735,000 in August, the Commerce Department said. Analysts had expected a 10,000 drop from the previously reported 780,000.’
Sales in September were 23.3% below year-ago levels. Inventory of new houses for sale is now estimated at 523,000, or an 8.3 months’ supply at current sales levels.
Inventory analysis: As with existing home sales yesterday, inventory is down slightly in absolute terms, but when expressed in terms of ‘months to sell,’ inventory is slightly higher.
Total homes Existing homes Existing homes New homes New homes
Month for sale for sale months to sell for sale months to sell
Sept. 07 4.92 million 4.40 million 10.5 mo. 523,000 8.3 mo.
Aug 07 5.11 million 4.58 million 10.0 mo. 529,000 8.2 mo.
Aug 06 4.49 million 3.92 million 7.5 mo. 568,000 6.6 mo.
Aug 05 3.34 million 2.86 million 4.7 mo. 479,000 4.7 mo.
Aug 04 2.88 million 2.48 million 4.6 mo. 404,000 4.2 mo.
Sources: NAR (Existing homes), Commerce Dept. (New homes)
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Photo Credit: AP