Last month I noted huge new sales negative revisions for the August. This month the Census Department reports negative revisions for September.
If the pattern holds, there will be negative revisions next month too.
Please consider the New Residential Construction Report for October.
New Home Sales
- Sales of new single‐family houses in October 2022 were at a seasonally adjusted annual rate of 632,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
- This is 7.5 percent (±20.8 percent)* above the revised September rate of 588,000, but is 5.8 percent (±19.6 percent)* below the October 2021 estimate of 671,000.
- In September I reported New Home Sales Jump an Astonishing 28 Percent in August to 685,000. But today we see the number is 661,000.
- This month the Census Department revised September from 603,000 to 588,000.
Notice the margin of errors in these reports ±20 percent!
- The median sales price of new houses sold in October 2022 was $493,000.
- The average sales price was $544,000.
For Sale Inventory and Months’ Supply
- The seasonally‐adjusted estimate of new houses for sale at the end of October was 470,000.
- This represents a supply of 8.9 months at the current sales rate.
New Homes Sold Long Term
A long term chart puts things into proper perspective. New home sales are about where they were in 1963.
New Homes For Sale By Stage of Construction
Of the purported 470,000 homes for sale, 111,000 have not even started, nor are they likely to in this environment. A mere 61,000 are actually completed.
To be generous, there are 359,000 homes for sale, that have at least been started, with 298,000 under construction.
The reported new homes for sale supply includes 111,000 homes that have not even been started.
What About Cancellations?
The Census Department does not subtract cancellations from its reports and cancellations due to rising mortgage rates have been huge.
In declining sales environments and economic downturns (now), the Census Department dramatically overstates sales, even if we ignore revisions.
In economic upturns, the Census Department understates sales.
Existing Home Sales Crash
On November 18, I commented Existing Home Sales Decline 9th Month, Down Another 5.9 Percent
- Existing home sales are down 28.4% from one year ago.
- Existing home sales are down 31.7% since January.
That's a crash. And never have we seen such declines other than in recessions.
Yield Curve Inversion Recession Signal is the Strongest in Over 40 Years
Factoring in revisions, cancellations, margins of error of 20 percent, and an alleged supply of homes that does not even exist, the entire new residential construction report is a joke.
This post originated at MishTalk.Com.
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