In the game of pin the tail on the number, today’s release on new home sales was a big miss. Wall Street conomists had expected a seasonally adjusted annualized number (i.e. seasonal adjustment error times 12) of 520,000. Instead, that number came in at 481,000. Are we surprised?
Hell no. Except this month’s number is just as misleading as last month’s, partly a result of the stupid practice of annualizing monthly seasonal adjustment errors or other one time anomalies in the data. In the big picture, what matters is the actual trend of actual sales and asking the question whether anything has changed. In that regard, the answer is still a resounding “NO†in terms of sales volume, but “maybe†in terms of the price bubble.
If you recall last month, the new home sales number game was a big “beat.â€
U.S. New Home Sales Reach Highest Level in Seven Years
blared the Wall Street Journal. It subheaded:
Sales of newly built single-family homes increased 7.8% in February to annual rate of 539,000
Holy cow! This month’s 481,000 looks like a veritable crash. But it wasn’t. And the reversal was both predictable, and predicted.
IÂ wrote last month:
