Wednesday, November 29, 2006

New Home Sales Collapse!

Today, the U.S. Census Department released its monthly “New Residential Home Sales” report for October displaying, yet again, the dramatic and unprecedented extent to which home construction is collapsing.

Generally reported as showing prices increasing and sales declining, today’s report could not have done more to shatter the false notions of “the worst being behind us” or housing “market stabilization” as spun previously by Greenspan and Lereah.

The report does, in fact, show an increase to both median and average price for a new home but as we all are well aware, the significant incentives that home builders have been offering are NOT reflected in this report so the price movement is a bit of a “red herring”.

The current edition of the New Home Sales report looked completely abysmal.

Among other things, the report showed high double digit declines to homes sales at the national level and in every region.

Look at the following summary of today’s report:

National

  • The median price for a new home was up 1.8% as compared to October 2005.
  • New home sales were down 25.4% as compared to October 2005.
  • The inventory of new homes for sale increased 13.9% as compared to October 2005.
  • The number of months’ supply of the new homes has increased 55.6% as compared to October 2005.
Regional

  • In the Northeast, new home sales were down 52.6% as compared to October 2005.
  • In the West, new home sales were down 36.5% as compared to October 2005.
  • In the South, new home sales were down 15.4% as compared to October 2005.
  • In the Midwest, new home sales were down 26.5% as compared to October 2005.

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