Housing News, What a Drag

by Lee Adler, Wall Street Examiner

Almost two weeks ago mainstream media headlines breathlessly reported a 6% gain in new home sales in April to a seasonally adjusted annual rate of 433,000. That beat the consensus expectation of 415,000. The seasonally adjusted, annualized headline number is fictitious. April’s actual new home sales totaled 41,000.

Follow up:

Housing Starts DeclineClick to enlarge

April is normally the busiest month for new home sales. As always, it posted an increase versus March but the increase was just 2,000 units.That was the same as last April’s monthly bump. However, this April’s sales were 4.7% less than April 2013′s. Sales momentum is barely improved from March’s 4.9% annual decline and is worse than February, which dropped 2.8% year over year. That was in a month supposedly adversely impacted by the weather.

The most recent 3 months combined totaled 4.1% less than the same 3 months last year. This is a sharp slowdown from the prior 3 months which had had a solid gain.

Contrary to the headline indication, there’s no sign of a second wind to the housing “non recovery”. Sales in April were just 11,000 units more than the 30 year record low of 30,000 units set in April 2011. They remain 75,000 units less than the April record high of 116,000 set in 2005.

Making matters worse, single family housing starts increased in April. Falling sales are worsening the supply demand gap that began to form in March when starts rose and sales fell. If sales don’t increase sharply, the gap can only be closed by a reduction in housing starts. These are the type of conditions that normally lead to a slowdown in housing development activity. Housing could become a drag on the economy in the months ahead.

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

 navigate econintersect.com


Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved