New Home Sales Fall 42%

Sales of new one-family houses in April 2008 were at a seasonally adjusted annual rate of 526,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

This is 3.3% (±11.7%)* above the revised March rate of 509,000, but is 42.0% (±8.1%) below the April 2007 estimate of 907,000.

As we discussed ad nauseum, given the margin of error, the monthly change is not statistically significant . . .


courtesy of Barron’s Econoday


New Home Sales in April
Census Bureau

Download newressales_April_2008.pdf

* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.

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  1. Steve Barry commented on May 27

    I wish I were a psychologist…this country is delusional. Nobody I talk to ever wants to listen to economic reality besides bitching about gas prices. Twenty-five years of the Greenspan put have screwed up the country. They can’t handle the down 42% number, so they are fed the plus 3% number. The mainstream media wants to be negative about politics and crime…every bloody story makes headlines. But on the economy, the 2 minute segment on the 10 o-clock news, it is “great day on Wall Street” if the market goes up. Barry has talked about the Citigroup Panic/Euphoria Model before…look at it now. Now is the time to talk about it, when investors are at record levels of euphoria (per this measure) and reality is that a long recession or worse is here. Either that or this measure is useless and should be ignored. Which is it?

  2. O’H commented on May 27

    Thank-you for puting the numbers into proper perspective.

    It is unfortunate the March sales numbers were not revised even lower- the m/o/m increase could have been even more insignificant- and that would have helped juice the stock market to more acceptable levels.

    Just think, if March sales had just been revised down to 400,000 we would have a m/o/m increase of over 30%! And that would have sent stock prices to the moon. Why can’t the govt gets it act in gear? Who’s side are they on anyway? Well perhaps my suggestion is a little too heathen a strategy. I suppose the government’s approach is much more subtle and tactful. I suppose you cannot go wrong peddling insignificant data: Not damned if they do, not damned if its wrong.

  3. bluestatedon commented on May 27

    And for this week’s installment of Clueless and Easily Surprised Business Writers:

    Consumer confidence hits 16-year low in May
    May 27, 2008

    NEW YORK (Reuters) – Consumer confidence plunged unexpectedly to its lowest in 16 years in May as rising gasoline costs and falling home prices made Americans nervous about the future, a survey released on Tuesday showed.

    There’s only two reasons the plunge in confidence could be “unexpected”:
    One, you’ve been in a coma.
    Two, your head has been firmly lodged in your nether regions.

  4. Robert Dye commented on May 27

    The spring home selling season never got off the ground this year despite improving affordability and a superabundant selection for buyers. Home sales data through April still show a comatose house market in all regions of the U.S.

    The larger existing home sales category continued to slide in April, falling by 1.0 percent for the month to hit an annual rate of just 4,890,000 units. Only the West region showed some improvement in existing home sales, firming up by 6.4 percent in April. The South was unchanged for the month. The Northeast declined by 4.4 percent, and the Midwest gave up 6.0 percent.

    The already bloated inventory of existing homes on the market swelled to 11.2 months’ worth, the second consecutive monthly gain since inventories of existing homes dipped in February. The median sales price of an existing home firmed up for the second month in a row, to $202,300, but is still down 8.0 percent from one year ago. April data for new home sales shows a 3.3 percent increase for the month to an annual rate of 526,000 units. The “improvement” in April follows a sizeable downward revision in the March data. Compared with February, April new home sales are still down 8.0 percent. The median sales price of a new home improved in April to $246,100. The inventory of new homes dipped from the March high to 10.6 months’ worth in April.

    The vital signs for the U.S. housing market remain weak.

  5. Bruce commented on May 27

    So you are skeptical that business sites are skewed to the brught side?

    Go to CBS Marketwatch today (Tuesday)..

    Headline says markets are mixed because “Economic data are interpreted as featuring no unpleasant surprises”…

    Just below that line…”Consumer confidence at 16 year low…(!!)……..

    Who in the name of Alan Greenspan writes this stuff??

    Bruce in Tennessee

  6. Mista B commented on May 27

    Economic news IS mixed.

    It’s a mix of bad, horrendous, scary, and Armageddon. :)

  7. Richard commented on May 27

    It’s ad nauseAm (not ad nauseUm)

  8. Sanjay Bigglesworth commented on May 27

    Didn’t Barry post a while back with the data point that housing bottoms close to the 50% decrease in New Home Sales.

  9. VJ commented on May 27

    Yun Strikes Again. Why is he the last to know that plummeting housing values is NOT just a sub-prime problem ?

    LAWRENCE YUN, ECONOMIST, NATIONAL ASSOCIATION OF REALTORS: Now, we are seeing a neighborhood by neighborhood variation. So, even within a locality, some neighborhoods with very little sub-prime loan exposure, they’re holding on fine. It’s the neighborhoods with large exposure to sub-prime loans, this is where we are seeing 20, 30 percent price reductions.



  10. PureGuesswork commented on May 28

    Previous cycle low was a 401k figure in January of 1991. The cycle high was July 2005 at 1389k. The revised March 2008 figure of 509k represents an 89% retracement of the up move which ended in the bubble from 2003 to 2005.
    Yet a long term chart going back to the late 1960’s shows a cyclic pattern ranging from about 900k on the upside to lows around 400k (or slightly below). The question is–with the bubble outpacing the previous cyclic high by over 50%–how much will the downmove have to compensate in the other direction?

  11. The Big Picture commented on May 30

    Not So Fast On New Home Sales

    On Tuesday, we noted that New Home Sales fell 42%. There was one small piece of the data I failed to mention earlier in the week, which is worth discussing — the March revisions: 1) Revisions: April’s (unrevised) data for new homes was 526k annualized…

  12. The Big Picture commented on May 30

    April New Home Sales – Revisited

    On Tuesday, we noted that New Home Sales fell 42%. There was one small piece of the data I failed to mention earlier in the week, which is worth discussing — the March revisions: 1) Revisions: April’s (unrevised) data for new homes was 526k annualized…

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