Home Sales Disappoint Twice

Fri, 27 Jul 2012 17:15:24 +0000

Sales of newly built homes fell hard in June, despite newfound optimism in the housing recovery, especially among the home builders themselves.

Signed contracts to buy new homes fell 8.4 percent from the previous month, according to the U.S. Commerce Department, although they are still up 15 percent from a year ago.

Sales levels are now at their lowest since January.

This is the second miss for housing in the same month. Sales of existing homes fell as well, despite expectations for a gain.

The biggest drop in new home sales came in the Northeast, down 60 percent month-to-month, but the Northeast represents the smallest sample and is therefore highly volatile. In May it was that same segment of the country that pushed new home sales higher. The biggest June gains were seen in the Midwest, with a slight gain out West, where dwindling supplies of foreclosed homes have removed some of the competition for the home builders.

“With new home sales at current levels 75 percent below peak and with a run rate near 50+ year lows, new home construction has bottomed, but there is still a long bridge between a bottom and a robust recovery, as existing home inventories (shadow and otherwise) remain elevated,” writes Peter Boockvar, an analyst at Miller Tabak.

These latest numbers fly in the face of rising home builder optimism and a huge run on the stocks of the public builders. Some analysts, however, have been warning that this recovery is fragile at best, given other factors in the economy, specifically lackluster job growth and poor consumer sentiment.

“Builder stocks have continued to outperform the market as demand has remained strong into summer; also, earnings and the next few macro data points should be positive,” wrote analysts at Deutsche Bank earlier this week. “However, we think downside tail risk is mounting for 2H12. It shouldn’t take more than muddle-through economic growth for housing recovery to continue, but the risks are that even that doesn’t happen or it happens unevenly against tenuous investor optimism.”

Several home builders reported big jumps in new orders this spring, but those orders did not translate into pricing power for the market. Prices of new homes fell 3.2 percent in June after several months of gains.

Single family housing starts rose 4.7 percent in June from the previous month to a four year high, but they are still running at about one third the historical average volume. Inventories of new homes for sale rose to 144,000, representing a 4.9 month supply, but that is still historically very low.

Questions? Comments? And follow me on Twitter @Diana_Olick

New Doubts Over Housing Data

Sat, 26 Feb 2011 18:42:30 +0000

Page 1 of 3 | Next Page
Show Entire Article

Most consider President’s Day weekend as the official start of the spring housing season.

There is, therefore, no more crucial time than now to have reliable data at our disposal for home sales, prices and inventories.

How else do buyers, sellers and investors know how to proceed? Unfortunately, the housing crash itself has undermined the veracity of those readings.

With the boom and the bust came the attention. Housing brought our economy down, and in doing so, boosted itself to the headlines. As with any big story, a cottage industry sprang up around it. Data providers came out of the woodwork, and as online sale and foreclosure web sites proliferated, so too did their ability to add to that data pool. The result is double edged: On the downside, some data providers are less-than accurate, but on the upside, their sheer numbers provide a system of checks and balances, tempering the most outrageous assertions.

So it seems sort of appropriate that today, as a new controversy swarms around potential errors in home sales figures from the National Association of Realtors, the exalted and much-contested SP/Case-Shiller Home Price Index is released.

It reports that home prices are dangerously close to an official double dip. Other data providers have been asserting recently that SP/Case-Shiller is too bullish (and of course too bearish).

Page 1 of 3 | Next Page
Show Entire Article

Warren Buffett: ‘My Trigger Finger is Itchy’ for Major Acquisitions

Obama says government shutdown imperils economy

Suddenly, a Rise in Piracys Price

Week Ahead: Oil Will Steer Stocks, but Jobs Report and Bernanke on Tap

Nintendo 3-D Handheld Goes on Sale in Japan

More Top Stories

Article source: http://www.cnbc.com/id/41719022?__source=RSS*blog*&par=RSS

homesmillbrae.com » Downside

Home Sales Disappoint Twice

New Doubts Over Housing Data