The New Home Sales report is another negative revision bog in November
October flashback
Before we look at our November report joke, let’s recap what I said last month on “New Home Sales Bounced 7.5 Percent Off Negative Reviews”
Last month I noticed huge negative reviews of new sales for the month of August. This month, the Census Bureau reported negative reviews for September.
If the pattern continues, there will be negative reviews next month as well.
New residential construction report for November
With that introduction, please consider the November New Residential Build Report.
November Reviews
- August 661,000 to 646,000
- September from 580,000 to 559,000
- October from 632,000 to 605,000
Negative Groundhog Day
These reviews come on top of the negative reviews in October and September and have now been downgraded again.
Is this a joke or what? Maybe negative groundhog day?
Motivate!
Primer November – 640,000!
It took a while to compile the report today because the St. Louis Fed did not have numbers to download for the month of November as of 1:00 PM or Central.
I manually entered the numbers and revisions into my spreadsheet.
November report numbers
- New home sales of new single-family homes in November 2022 were at a seasonally adjusted annual rate of 640,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
- This is 5.8 percent (±22.7%)* above October’s revised rate of 605,000, but 15.3 percent (±13.0%) below the November 2021 estimate of 756,000.
- The median sales price of new homes sold in November 2022 was $471,200. The average selling price was $543,600.
- The seasonally adjusted estimate of new homes for sale at the end of November was 461,000. This represents a supply of 8.6 months at the current sales rate.
Not that anyone has any reason to believe the numbers, but there you go. Well, we recorded a 5.8 percent rise in new home sales in November.
Seasonally adjusted new home sales since 1963
pleasing bounce
With that reported rise of 5.8 percent in November of 2022, I’m pleased to report that sales are approaching the 665,000 figure recorded in July of 1963.
New house for sale offer
New Home Sales Supply data from the Census Administration, graph by Mish
Cleaning Campaign
This month, the Census Department has revised the monthly view for every month for a full year.
The other reviews “only” date back to August. The supply numbers wouldn’t make sense even if there were no reviews as the following chart shows.
New homes for sale by stage of construction
Scroll to continue
New Home Sales Report by Stage of Construction from the Census Department, charted by Mish
Construction detail stage
- Of the purported 461,000 homes for sale, 107,000 haven’t even started, not likely in this environment. Only 64,000 have actually been completed.
- To be generous, there are 354,000 homes for sale, at least started, with 290,000 under construction.
Keep in mind that the month’s offer includes 107,000 homes that haven’t started yet.
What about cancellation?
Census management does not subtract cancellations from its reports and cancellations because mortgage rates were huge.
To reiterate, none of these reviews include cancellation and cancellation rates as high as 25 percent!
In declining sales environments and (now) economic stagnation, the stats department exaggerates sales dramatically, even if we ignore reviews.
In periods of economic recovery, the Department of Statistics reduces turnover.
Existing home sales collapse
On Dec. 21, it commented that existing home sales fell in the 10th month, down another 7.7 percent.
- Existing home sales are down 35.4% from a year ago.
- Existing home sales are down 37% since January.
This is the deal breaker. We have only seen such declines in recessions. We expect price to follow but not near as fast as in 2008-2009.
Well, that’s fine because almost everyone tells me jobs are gang-oriented. are they?
The Federal Reserve Bank of Philadelphia adjusted jobs by 1.2 million for the second quarter
For discussion, please see the Federal Reserve Bank of Philadelphia’s Revised Payrolls Decreased by 1.2 Million in the Second Quarter
The discussion was a focus of discussion on Twitter just as was the contradiction between GDPR and GDI that should match.
BEA has adjusted income significantly lower, and discrepancies generally lead to declines in recessions or in a recession.
Income is lower and jobs are higher? The economy is doing well but housing, industrial production and retail sales are struggling.
Well, believe what you want.
Expensive advice
Census Bureau housing reports are best read with a shot of Pepto Bismol in your whiskey while on a tuk-tuk with Elon Musk.
This post originated at MishTalk.Com.
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