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

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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

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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

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

November's 52,000 sales gets reported as 719,000.

That puts seasonal adjustments and annualized rates in proper perspective.

Mike "Mish" Shedlock

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