The headlines read “
New home sales stay strong in April”, “
US home sales unexpectedly increase in April” or “
Builders boosted on April home sales surprise” but before you get all excited and go plunk down a deposit on that new
Toll Brothers (
TOL) hulk, let’s take a closer look at those numbers and see what they may be actually saying.
First, the headlines should have read “New Homes sales down 5.7% year over year as compared to April 2005” or “New Home sales down 11.2% year to date” as either the year to date or the year over year figure is arguably a more substantial measures of the markets decline.
Additionally, only a few articles felt it important to report that the March 2006 figure was revised down from 1.213 to 1.142 million homes sold. That 5.8% downward revision yielded a new March 2006 year over year decline of 13.5% as compared to March of 2005.
Similarly, the April estimate of a 4.9% increase in homes sold carries with it an +- 11.5% sampling error so stay tuned for the revision next month to get a more accurate version of this number.
I’m not trying to rain on the parade of anyone hoping the housing bubble has been overstated but these articles were overly optimistic. Simply read the Census Bureaus report for yourself and consider the why most new sources choose to pump the monthly increase instead of reporting the year over year decline.
The headlines read “New home sales stay strong in April”, “
