Interest Rate Roundup

Wednesday, September 27, 2006

New home sales musings

The new home sales figures came out today. Lots of ways to parse the data, but here's my take:

* The reported sales gain between July and August was 4.1%. That was based on an August seasonally adjusted annual sales rate of 1.050 million units. But look at what Census did with the July SAAR of sales -- they cut it to 1.009 million from 1.072 million. Voila! A 2.1% decline turns into a 4.1% gain. I love gubmint accounting!

* What about supply? There was a tiny drop in for-sale inventory to 568,000 units in August from 570,000 in July. But July's figure was an all-time record. So not much good news there, though the "months supply at current sales pace" measure of inventory slipped slightly month-over-month.

* Median home prices dropped 1.3% year-over-year. That’s the first drop since 2003.

Lastly, as I mentioned, FORWARD indicators of sales like the MBA figures are pointing toward ongoing weakness in Septemmber.


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