Better Than Expected New Housing Data Is Not What The Doctor Ordered

Tyler Durden's picture


For the past several months, worse was better. Today, better is worse, after the release of April new home sales, which printed at a seasonally adjusted 343K annual rate, on expectations of a 335K print, or an increase from the April print of 328K, since revised to 332K. The mean and median price rose by 5.1% and 4.9% respectively. In non SAAR terms, this represented a total of 33K units sold in April, even as the units Under Construction and Completed were flat or declined, respectively. Sadly, this better than expected number, only meant that just as the market was getting quite gung ho on more QE in the aftermath of the ongoing European collapse, the good news pulled the rug from under the market, and the result was a plunge in virtually all risk assets.

As for the big picture, and how much of the 11K increase really matters as the actual series continues to plumb all time lows, we leave it to readers to decide.

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Wed, 05/23/2012 - 10:20 | 2454700 jaap
jaap's picture

But in any case they kill gold...


Wed, 05/23/2012 - 10:23 | 2454710 CPL
CPL's picture

..there is still Facebook.  LMAO!


Speaking of which, uptick rule has been fulfilled.


Time to break FB's back.

Wed, 05/23/2012 - 10:26 | 2454723 redpill
redpill's picture

Actually the headline is wrong.  They do not know whether new home sales increased or not.  The figure is not statistically significant as the margin of error includes zero.

The Census data is an extremely thin survey of 1 in 50 single family permits in 900 of 19,000 permit issuing places.  The data resolution is so bad they can't even provide state-level numbers.


Wed, 05/23/2012 - 10:33 | 2454757 dbomb12
dbomb12's picture

Kinda like the employment numbers  report give or take 100,000 seasonally adjusted of course

Wed, 05/23/2012 - 10:30 | 2454740 dbomb12
dbomb12's picture

That was probably the reson for the misleading stats, but it will catch up in the end

Wed, 05/23/2012 - 11:24 | 2454946 The Big Ching-aso
The Big Ching-aso's picture



Did they include Habitat for Inhumanity units?

Wed, 05/23/2012 - 10:21 | 2454701 jmcadg
jmcadg's picture

LOL QE Heroine Bitchez Go Cold Turkey

Wed, 05/23/2012 - 10:21 | 2454703 junkyardjack
junkyardjack's picture

Good news is bad, bad news is good.  Yea efficient market theory still works, nothing to see here....

Wed, 05/23/2012 - 10:21 | 2454704 Dr. Engali
Dr. Engali's picture

Welcome to  bizzarro world.

Wed, 05/23/2012 - 10:22 | 2454707 SHEEPFUKKER

Where good is bad and bad is good. No moral hazard here. 

Wed, 05/23/2012 - 10:25 | 2454718 Cognitive Dissonance
Cognitive Dissonance's picture

No moral(s) hazard here.

Fixed it for ya.

Wed, 05/23/2012 - 10:29 | 2454737 SHEEPFUKKER

thank you. my bad. 

Wed, 05/23/2012 - 11:25 | 2454950 The Big Ching-aso
The Big Ching-aso's picture



Maybe it was new government housing units.

Wed, 05/23/2012 - 10:22 | 2454706 LULZBank
LULZBank's picture

Typical withdrawl symptoms of junkies...

Wed, 05/23/2012 - 10:24 | 2454712 francis_sawyer
francis_sawyer's picture

I'm guessing that most of the buyers recently graduated from the University of Phoenix with a degree in Slumlording...

Wed, 05/23/2012 - 10:24 | 2454713 Cognitive Dissonance
Cognitive Dissonance's picture

So it's all fixed?????

Wow.....that was a close call. Nice job Ben.


Wed, 05/23/2012 - 10:59 | 2454869 jus_lite_reading
jus_lite_reading's picture

All fixed so insiders can sell faster than ever. As I said, these insiders sell more in company stock than the company brings to the table in earnings, yet the ponzi is up!! Look at TROLL BROS as a perfect example!!

So I was talking with my niece who just turned 18 this month and she was telling me that she "has no future." I was curious, so I asked a seemingly rhetorical question if she was going to college next year. Her answer, "no reason to go to college if I can't get a job when I graduate." Bottom line, most of her friends who are graudating this year will go to college but she said almost all expect to have no career when they finish... she would rather start working now making $20k per year than going to college. And she's a smart girl with a 3.8 average. Her sentiment reflects her peers. GAME OVER

Wed, 05/23/2012 - 10:24 | 2454715 FL_Conservative
FL_Conservative's picture

My hedges are performing nicely, thank you very much.  I would like to order up some more "good" news please.

Wed, 05/23/2012 - 10:24 | 2454716 Cdad
Cdad's picture

The Street cannot sell those "beat" numbers on TOL fast enough...

Wed, 05/23/2012 - 10:26 | 2454722 LULZBank
LULZBank's picture

Perhaps investors are thinking its perfect time to short PMs and go long real estate.

Wed, 05/23/2012 - 10:28 | 2454729 Cranios
Cranios's picture

You mean "no more acknowledged QE," right? They've never actually stopped monetizing TBs, have they?

Wed, 05/23/2012 - 10:29 | 2454736 Conman
Conman's picture

Odd they flashed the headline on cnbc and Bloomberg and quickly took it down.

Wed, 05/23/2012 - 10:30 | 2454741 pleseus
pleseus's picture

Sorry folks. No QE in June. Just look at Gold.

Wed, 05/23/2012 - 11:59 | 2455101 mcguire
mcguire's picture

quite the opposite... who sells gold now but those who want the appearance of deflation.. higher gold price makes QE impossible, hence it must go down.  this is clearly manipulation. 

Wed, 05/23/2012 - 10:31 | 2454744 CreativeDestructor
CreativeDestructor's picture

Plunge was caused by a shockwave of Chuck Norris roundhouse kicking Junker while on the rescue mission at the European summit.

Wed, 05/23/2012 - 10:31 | 2454747 HaroldWang
HaroldWang's picture

I have a feeling shorts are going to get squeezed in both EURO and US markets later today. Don't overlook the positive news on housing and any potential news in Europe to really fuel this higher later in the day. Just my take.

Wed, 05/23/2012 - 10:33 | 2454758 Stackers
Stackers's picture

Dont the forget the Fed and ECB support of 1.30 area. The old low of 1.25ish will have "magically" strong support.

Wed, 05/23/2012 - 10:47 | 2454818 francis_sawyer
francis_sawyer's picture

What did we ever do in the days before 'magical' chart lines?

Wed, 05/23/2012 - 10:31 | 2454749 Stackers
Stackers's picture

2008 -- banks reporting losses, credit ratings getting cut left and right, markets gyrating in volatility --- KABOOM

2012 -- banks reporting losses, credit ratings getting cut left and right, markets gyrating in volatility --- _______

Wed, 05/23/2012 - 10:39 | 2454782 Vince Clortho
Vince Clortho's picture

Can I buy a vowel?

Wed, 05/23/2012 - 10:32 | 2454752 otto skorzeny
otto skorzeny's picture

do they include new cardboard box inhabitation in these numbers? "Of course we do" says Larry Yun of NAR "we need to get our 5% commission"

Wed, 05/23/2012 - 11:39 | 2454993 Poetic injustice
Poetic injustice's picture

Only subprime cardboxes are included.

Wed, 05/23/2012 - 10:33 | 2454756 UTICA CLUB XX PURE

This is a bad pill for my stacks.

Wed, 05/23/2012 - 11:49 | 2455049 DosZap
DosZap's picture

This is a bad pill for my stacks.

No, this is an EXCELLENT time to consider  ADDING to those stacks.....................and you damn well best buy it at this point.

Esp if it breaks 1500.00, or Slvr @ under 27.00.

The problems are just beginning.

Wed, 05/23/2012 - 10:37 | 2454775 Seasmoke
Seasmoke's picture

I feel sorry for whoever has to put out the numbers. It must be so confusing in our bizarro world to know if you are supposed to fudge the numbers up or down.

Wed, 05/23/2012 - 10:39 | 2454781 kito
kito's picture

the only reason for any uptick in sales is due to investment vehicles going on a massive shopping spree. in some areas, hedge funds and other large investors are buying up to 25 percent of lower priced homes. there is literally billions of dollars being thrown at the housing market by the new land/overlords of housing.  these investors understand that rentals are the future and the the average family wont be buying a home anytime soon.......

Wed, 05/23/2012 - 10:45 | 2454811 blunderdog
blunderdog's picture

Being a landlord is a job. 

They're nuts to be making the bet that there's enough fat in that equation to generate strong cashflows.

Wed, 05/23/2012 - 10:50 | 2454820 francis_sawyer
francis_sawyer's picture

see 'slumlord' comment above... If the hedgies were really smart, they'd be buying up property underneath bridges & cornering the market on cardboard...

Wed, 05/23/2012 - 11:15 | 2454922 blunderdog
blunderdog's picture

It's comedy, really.

If the incomes don't support the public's ability to finance their HOMES, it doesn't matter whether it's mortgages or rent.

You can't get blood from a stone.  The incomes ARE NOT THERE relative to current real-estate valuations.

The problem is: all the folks whose net wealth has tripled over the past 20 years aren't doing their part by buying thousands of homes.

We're living in squatters' paradise.

Wed, 05/23/2012 - 10:58 | 2454858 Conman
Conman's picture

Until they realize that being a landlord in a depressed economic area is the worst idea ever. Dealing with deadbeats and just general upkeep is not worth the opportunity costs of their capital. They are better off in roach hotel called AAPL.

Wed, 05/23/2012 - 12:19 | 2455222 DosZap
DosZap's picture


They will soon discover that rental rates(in MANY AREAS) are as high as NEW home prices.

Wed, 05/23/2012 - 10:41 | 2454794 carbonmutant
carbonmutant's picture

Homebuilders preparing for the migration of middle class Europeans...

Wed, 05/23/2012 - 10:43 | 2454800 Snakeeyes
Snakeeyes's picture

MBA purchase applications were DOWN 3% last week.

True, existing home sales rose 3.2%, but the house price increase was bogus (measurement error). Compare to chart of Case-Shiller or FNC repeat sales indices.

Seriously, with tight credit and mortgage applications falling, HOW can we have a vibrant recovery?

Wed, 05/23/2012 - 11:02 | 2454854 FreeMktFisherMN
FreeMktFisherMN's picture

Exactly, Snakeeyes. By the way, always been a big fan of GMU (well, at least since 2006) and even wanted to go there even though I'm from MN and it was totally based on that amazing Final 4 run! Now I go to a university and am econ major stuck with keynesian profs, including some neo-marxists who I've blasted in some emails. Fan of Walter Williiams and some other faculty at GMU econ dept, too, and never knew that GMU was such a huge Austrian school advocate. I follow Mercatus Center, too.

Wed, 05/23/2012 - 11:08 | 2454902 Bastiat
Bastiat's picture

. . . and without a recovery (ie jobs) who can buy a house?

Wed, 05/23/2012 - 10:56 | 2454856 deez nutz
deez nutz's picture

look for a quick release of some bullshit "confidence index" that has "unexpectedly" risen to calm the market.  same old song and dance

Wed, 05/23/2012 - 10:59 | 2454866 adr
adr's picture

Seasonally adjusted "sales" can't be used to measure anything.

A actual decline of 100k units could be shown as an increase of 300k units sold due to adjustments after expecting a decline of 120k units.

Just like increasing spending by $200 million is actually cutting $50 million because you said the spending increase would be $250 million before.


That is how the wonderful mind of Krugman can say Europe is falling apart because of austerity and spending cuts. He says the world needs to spend another 15 trillion to get back to growth. Any number below that is actually implementing painful cuts.

Wed, 05/23/2012 - 11:12 | 2454906 virgilcaine
virgilcaine's picture

RE is the 800 lb anchor drag on the Economy. 

Wed, 05/23/2012 - 13:35 | 2455707 Dingleberry
Dingleberry's picture

So what? A few points up or down? Are we looking for an "Apple-esque" type gain again?  RE will remain basically flat indefinitely. You don't need to be a brilliant thinker to understand the deflationary consequences of RE. "Homeowners" fees have gone up, particularly insurances and water/utilities.  Taxes have gone down. And voters are now given a choice: pay more tax or lose your fire/police/schools.  Which of course causes RE to decline if you don't pay more.  Even if RE goes up, workers today have to be extremely mobile. Mobility has a $$$ value in and of itself.  The renters get that bonus.  You do not want to be stuck in a home, esp. in a declining 'hood.  Buying RE is still a gamble.  But the Fed has turned us all into riverboat gamblers due to zirp.

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