Courtesy of Mish.
The Census Bureau Residential Home Sales report shows Sales of new single-family houses in April 2014 were at a seasonally adjusted annual rate of 433,000.
Sales are 6.4 percent (±15.9%) above the revised March rate of 407,000, but is 4.2 percent (±14.2%) below the April 2013 estimate of 452,000.
Supply is 5.3 months at the current rate of sales.
“Better, Not Strong”
Bloomberg reports Purchases of New U.S. Homes Increase by Most in Six Months but the details (shown below) are interesting.
Purchases of new U.S. homes rose in April by the most in six months as buyers began to respond to falling mortgage rates.
“The deep freeze is over and I think we can expect new home sales to continue to rise,” said David Berson, chief economist at Nationwide Insurance in Columbus, Ohio, who projected a 432,000 rate of April sales. “It’s better; it’s still not strong.”
New-home sales, which account for about 7 percent of the residential market, are tabulated when contracts are signed, making them a timelier barometer than transactions on existing homes.
New Home Sales by Region (in thousands)
| Year | Month | United States | Northeast | Midwest | South | West | Month’s Supply |
|---|---|---|---|---|---|---|---|
| 2013(r) | January | 453 | 31 | 58 | 222 | 142 | 3.9 |
| February | 448 | 38 | 67 | 209 | 134 | 4.1 | |
| March | 440 | 33 | 61 | 237 | 109 | 4.2 | |
| April | 452 | 32 | 62 | 260 | 98 | 4.3 | |
| May | 431 | 25 | 70 | 238 | 98 | 4.5 | |
| June | 459 | 33 | 56 | 253 | 117 | 4.2 | |
| July | 367 | 32 | 53 | 190 | 92 | 5.6 | |
| August | 379 | 32 | 58 | 206 | 83 | 5.5 | |
| September | 399 | 25 | 60 | 220 | 94 | 5.5 | |
| October | 450 | 32 | 68 | 264 | 86 | 4.9 | |
| November | 445 | 33 | 57 | 243 | 112 | 5.0 | |
| December | 442 | 25 | 60 | 251 | 106 | 5.1 | |
| 2014 | January (r) | 457 | 30 | 51 | 256 | 120 | 5.0 |
| February (r) | 437 | 24 | 57 | 261 | 95 | 5.1 | |
| March (r) | 407 | 30 | 57 | 228 | 92 | 5.6 | |
| April (p) | 433 | 22 | 84 | 235 | 92 | 5.3 |
Take a good look at that last line. The surge in new homes is entirely in the Midwest. Didn’t the Northeast have bad weather? Perhaps the bad weather lingered on in the Northeast. Alternatively, perhaps the Midwest was the most undervalued area.
Regardless of reason, this huge distortion should not inspire much national confidence.
Percent Changes and 90% Confidence Levels
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