According to US Census, new home sales are up 7.3% in April 2011 over March. Econintersect could argue sales might be better, but would need to ignore 2010 data.
When you need a microscope to see the change – likely there is little change.
The difficulty in month-over-month analysis, is that if you have a previous month which is unusual – or that there are new normal characteristics – your quantitative analysis distorts a reasoned conclusion.
The facts are:
- Prior to the Great Recession, March was a better sales month than April. In the “New Normal”, April is better than March.
- New home sales were a major component in driving GDP prior to the Great Recession. As long is it continues to fall year-over-year, it is an economic headwind.
- Year-over-year analysis shows March and April are down a seasonally unadjusted 22%.
- Year-over-year data comparisons are corrupted because of the effect of the first time home buyers stimulus last year. If 2010 data is ignored, home sales are no longer falling – but still only one-third of the pre-recession levels.
There is no evidence yet of a real bottom in new home sales, although Econintersect believes that one will appear in next few months. It is difficult to see improvement in new home sales when (1)year-over-year data has been lower for 72 of the last 76 months (even with a stimulus), (2) it was down 22% year-over-year this month, and (3) sales are only 1/3 of the pre-crisis peak.
The facts still are not pretty.
“Bottoming” New Housing Data Is A Reflection of the Economy by Steven Hansen
Real Time Home Price Index Shows Housing Price Strength by Scott Sambucci
CoreLogic Says Home Prices Down for Last 8 Months by Steven Hansen
Pending Home Sales Do Not Foretell Housing Recovery Is Underway by Steven Hansen
Strategic Defaults: A Bad Situation That Could Get Worse by Keith Jurow
Is it Time to Invest in Las Vegas Real Estate? by Keith Jurow
Strategic Defaults Threaten All Major US Housing Markets by Keith Jurow (Minyanville)
Case-Shiller: Photofinish Shows Housing Almost In Double Dip by Steven Hansen
Looking Past the Case-Shiller: It’s all about Supply by Scott Sambucci
Economic Data Points to Growing Profitablity in Residential Builders by John Lounsbury and Steven Hansen
We Could be Near a Housing Bottom by John Lounsbury (Seeking Alpha)