Don’t Get Too Excited About New Home Sales

March 2010 New Home Sales surged 27%, getting people who don’t follow the data series all hot and bothered.

Our advice? Calm down.

In February 2010, new Home Sales reached a record low. Bouncing off of those depressed levels is not a big deal.

And as we have discussed ad nauseum, new Home Sales are an extremely noisy data series, with a confidence level of ±21.1%

Over the past 10 years, double digit months have been followed by flat to negative data the very next month. That’s very likely due to the role Builders play in reporting the data to Commerce. The numbers work out over time, but any given month is quite suspect.


Click for ginormous charts

NSA New Home Sales

Courtesy of Calculated Risk

New Home Sales, 1963-Present

Courtesy of Calculated Risk

Courtesy of Barron’s Econoday


New Home Sales Data: Don’t rely On It Either (November 30th, 2005)

U.S. Department of Commerce, Manufacturing and Construction Division APRIL 23, 2010 AT 10:00 A.M. EDT
Erica Filipek or Stephen Cooper

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