New Home Sales Skyrocket 17.5% – NOT

Listening to the US Census talk about new home sales for December 2010 would give an impression that the economy is turning a major corner.

Sales of new single-family houses in December 2010 were at a seasonally adjusted annual rate of 329,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.  This is 17.5 percent (±17.7%)* above the revised November rate of 280,000, but is 7.6 percent (±17.0%)* below the December 2009 estimate of 356,000. ,The median sales price of new houses sold in December 2010 was $241,500; the average sales price was $291,400.  The seasonally adjusted estimate of new houses for sale at the end of December was 190,000.  This represents a supply of 6.9 months at the current sales rate.An estimated 321,000 new homes were sold in 2010. This is 14.2 percent (±4.2%) below the 2009 figure of 375,000.

One graph looking at the unadjusted data shows the depth of the hole we are in.

New home sales are likely up 10% (22,000 in December vs 20,000 in November) as historically November and December sales are approximately equal.  There is no recovery trend evident from this graph.

Using the unadjusted data, there are 8.7 months of new homes at the current sales rate with the number of homes for sale = 191,000.

Related Articles:

Case-Shiller Joins the Indices Saying Home Prices Are Down in November 2010 by Steven Hansen

Existing Home Sales Jump in December 2011 – But Not Enough by Steven Hansen

Altos Research: Home Prices Down 1.63% in December 2010 by Steven Hansen

The Great Debate ©:  Will Housing be a Drag on the Economy in 2011? – Part 1 by John Lounsbury

The Great Debate©:  Will Housing be a Drag on the Economy? – Part 2 by John Lounsbury

21% Decline Forecast for December 2010 Existing Home Sales by Steven Hansen