Today, the U.S. Census Department released its monthly “New Residential Home Sales” report for August causing a flurry of optimism in the traditional business media. It was speculated that the reports results, showing a 4.1% increase in sales as compared to July’s number, might help to propel the DOW, opening just 35 points away from its all time high, into record territory.
Typically, the bulls on Wall Street seem to be latching on to any positive news that might substantiate their hopes that the housing downturn is setting a bottom and will not present a dramatic impact to the economy but rather, a “soft landing”.
As usual, it’s this overly optimistic and myopic vision that seems to prevent general discourse on the realities of the current housing decline.
The fact is, July’s national new home sales number was revised down 5%, yielding a more dramatic percentage change to the August number which will, in all likelihood, be revised down as well.
Additionally, look at the other numbers found in today’s report:
National
- New home sales were down 17.4% as compared to August 2005.
- The number of new homes currently for sale increased 19.1% as compared to August 2005.
- The number of months’ supply of the new homes has increased 43.5% as compared to 2005.
Regional
- The West was down 17.7% as compared to July 2006 and down 34.7% as compared to August of 2005.
- The Midwest was down 19.6% as compared to August 2005.
- The South was down 10.2% as compared to August 2005.
