Today, the U.S. Census Department released its monthly New Residential Home Sales Report for January showing significant declines on a month-to-moth and year-over-year basis resulting in a new home sales level that is far lower than the supposed "bottom" seen last year.
In fact, the latest data indicates that at 308K annualized units, new home sales is now at the lowest level seen in seen since records have been kept (47 years) and 8.88% lower than the previous lowest low seen in September of 1981.
New single family home sales dropped 2.2% since January and 13% since February 2009 while median prices have increased 5.15% since February 2009.
Additionally, the monthly supply increased to 9.2 months while the median months for sale jumped to 14.4 months.
So much for the “end of the housing decline”…
Although many in the traditional media and elsewhere have been treating the government sponsored bounce seen since March 2009 as if it were a solid indication that the bottom was in, those who have followed this dataset for years know that one needs to rely on a mix of multiple metrics along with healthy dashes of skepticism and hunch in order to glean out the true trend.
Needless to say, these must be awfully disappointing numbers for many.
The bounce in new home sales seen throughout 2009 was an authentic increase in overall activity but not in “organic” activity… How would new home sales have trended without the government propping?
In any event, the “real” bottom was NOT IN during 2009, as I had correctly predicted in prior posts, and the level of new home sales is now at a low for this cycle.
The following charts show the extent of sales decline (click for full-larger version)