No bad homes, just bad prices
The number to watch in today’s new home sales report was price. The existing home sale number (by far the more important, with about ten times the volume of new home sales) disappointed yesterday (at 4.88 million vs. estimated 4.9 million), while today’s new home sales number beat the consensus handily, at 539,000 vs. an estimated 464,000.
We’ve seen any number of quibbles about supposed seasonal adjustment factors on the housing number in the blogosphere, but a close look at the unadjusted data don’t justify conspirophile skepticism. Builders moved more inventory by offering discounts, it appears.
The median sale price of existing homes fell from a peak of $310,000 last summer to just $270,000 in February, and new home prices came off last month from an average of $304,000 to $288,000. The overall data confirm anecdotal reports that home builders are offering discounts to move inventory. The monthly supply numbers are hard to evaluate: supply is to some extent a function of price. Homeowners will put homes on the market if the price is right and withdraw them if it isn’t.
The one really hard number is the vacancy rate.
Vacancies have fallen from the extreme levels of the 2008 crisis, to be sure, but still remain well above the normal level of the early 2000’s.
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