BizJournals Portfolio
Home >   Business Views, Opinions and Blogs >   Business Blogs >   Market Movers >  

New Home Sales Meaningless

Market Movers

by Yves Smith and Felix Salmon
Main
Will the Next World Bank President Be Another Bush Crony?   Equity Offerings, Private and Public

Recent Blog Posts

Links

May 24 2007 12:00am EDT

New Home Sales: Meaningless

When it comes to economic series, any one datapoint must be taken with a pinch of salt. And when the datapoint is such an outlier compared to previous reports in the series, one should discount it almost entirely. Case in point: today's new home sales report.

There are all manner of weird numbers here: the headline rate of new home sales was much higher than expected, at 981,000, while the median and average sales prices were much lower than expected, at $229,100 and $299,100 respectively. The fact that the numbers are unexpected, of course, is in and of itself reason to believe that they might well be revised significantly in future.

It's certainly worth noting that the 16.2% month-on-month rise in sales has a margin of error of 13 percentage points. So I'm not drawing any conclusions from this one report, even if Bloomberg's Bob Willis thinks it's "a sign low lending rates and incentives may be reviving demand". Especially since if you look at a graph of mortgage rates over the past few months, it clearly shows them going up, rather than down.

blog comments powered by Disqus
Real Business, Real Results
Out of the 'Family'

Did anyone at Microsoft ever watch the (gasp!) offensively funny show Family Guy?

Cruz Missile Lands

Ex-Morgan Stanley exec Zoe Cruz is now heading her own hedge fund. Are Wall Street's leaders done?

Scandal Chic

Martha, Bernie and Skilling know that what you wear for court can go a long way in public perception.

spotlight on

Health Care

Bad to the Bone No More

Companies such as General Mills say they're stepping up efforts to change employees' bad behavior and promote healthier lifestyles. Read More