A month ago we wrote "The Housing Recovery Has Been Canceled Due To Data Revisions [7]", in which we compared New Home Sales data as originally reported and as subsequently revised. We showed that all 4 out of 4 prior months had seen New Home Sales revised substantially lower, noting that "the euphoric, consensus-beating data for every single month since May has been revised lower, by on average 6% and as much as 9%. Perhaps finally people will realize that there is only one number that matters in the Census bureau's monthly new home sales report: the ±15.7 90% confidence interval. Well, people maybe, but not algos, who only care about one thing: whether the data beat or missed."
Sadly, people did not realize it.
So here is the latest New Home Sales data: moments ago the Census Bureau reported [8]that 458K new homes were sold in October (with a 16.5 error confidence), which missed expectations of a 471K increase from last month's 467K print, but that's ok, because last month's number was also revised substantially lower from 467K to 453K, which in turn will allow the mainstream propaganda to tout that New Home Sales jump in October to match the highest print since October 2013.
There is one problem: here is what the update chart of New Home Sales data looks like on a historical basis... and as revised. It sure puts that 458K "increase" in a slightly different light.
[9]
And while government workers are debating data fudging, perhaps they can tell their colleauges at the NAR to also pick it up: Pending Home Sales dropped 1.1% in October, missing expectations of a 0.5% increase, more than offsetting the modest 0.6% increase last month. That said, Larry Yun is still doing a great job [10]when it comes to pitching his conflicts of interest:
Lawrence Yun, NAR chief economist, says despite October's modest decline, contract signings have remained at a healthy pace now for six straight months. "In addition to low interest rates, buyers entering the market this autumn are being lured by the increase in homes for sale and less competition from investors paying in cash," he said. "Demand is holding steady but would be more robust if it weren't for lagging wage growth and tight credit conditions that continue to hamper those individuals looking for relief from rising rents."
"The increase in median prices for existing-homes has leveled off, representing a healthier pace that has kept affordability in-check for buyers in many parts of the country while giving more previously stuck homeowners with little or no equity the ability to sell," says Yun.
Sorry Larry, as we showed yesterday [11], Americans have given up on the Old Normal American dream. The New Normal one: living in your car.
[12]
[13]
