Post by unlawflcombatnt on Jun 26, 2006 15:24:00 GMT -6
Today's New Home Sales report showed an increase in the annualized sales rate for May over April. However, the overall trend is downward. The annualized New Home Sale rate has been less for each month of 2006 compared to the same month one year earlier. February 2006's annualized rate of 1.038 million was much less than February 2005's 1.247 annualized rate. March 2006's 1.114 million was less than March 2005's of 1.307 million/year. April 2006's 1.180 million rate was less than April 2005's 1.269 million annualized rate. May 2006's 1.234 million is also less than May 2005's 1.311 annualized rate. In fact, May's annualized New Home Sale rate is 5.9% less than May 2005's rate. Below is a modified copy of the annualized rates from the U.S. Census Bureau (taken from a combination of March's report and June's report.)
![](http://i27.photobucket.com/albums/c190/unlawflcombatnt/6-26-06grphNHSlsCensCtrsd.gif)
The actual raw monthly numbers show a much larger slowdown. The actual month-to-month slowdown comparisons are February 2006 vs. February 2005, sales decreased 23 %. March 2006 vs. March 2005, sales declined 16%. April 2006 vs. April 2005, -10%. May vs. May, -5%. The year-to-date decline in New Home Sales compared to the previous year is almost 11%. All of this can be seen below on the following modified chart from the U.S. Census Bureau.
![](http://i27.photobucket.com/albums/c190/unlawflcombatnt/6-26-06grphNHSlsCensRawCtrst.gif)
Below is a graph from Briefing.com that shows a noticeable slow down in New Home price appreciation.
![](http://www.briefing.com/Common/Images/Content/PageContent/EcData/price.gif)
It's also noteworthy how monthly New Home Sales are almost universally over-stated. Following the original publication of a month's New Home Sale number, that number is usually revised downward. In fact, going back to December 2005, the total downward revisions to New Home Sales figures is a whopping 339,000. This is a huge revision when considering May's annualized New Home Sale rate was 1.234 million. By downwardly revising each months original number, it has been possible to make it appear that each following month's sales number represents an improvement. Below is a composite copy of several months' original New Home Sales numbers that were published by Briefing.com, starting with December 2005. Notice how earlier months' estimates have been revised lower. October's initially published annualized New Home Sales rate of 1.404 million was revised downward to 1.345 million. November's initially published annualized New Home Sales rate of 1.245 million was revised downward to 1.237 million. December's original rate of 1.298 million was revised down to 1.266 million. January's was revised downward 3 times from the original 1.233 million ultimately to 1.173 million/year. February's original 1.080 million was revised down to 1.038 million. March's original 1.213 million was revised down to 1.114 million . April's 1.198 million down to 1.180 million. The sum of the above mentioned reductions totals -339,000.
(The graphic below is actually a composite of 5 separate reports from Briefing.com, taken on successively more recent dates starting on the top with December 2005, with the last one on the bottom coming from 6-26-06.)
![](http://i27.photobucket.com/albums/c190/unlawflcombatnt/6-26-06grphHsngNHScompX1.gif)
The housing market is slowing, and slowing rapidly, despite today's report. Previous months' New Home Sales reports are universally lower than initially reported by the U.S. Census Bureau. Furthermore, there appears to be much less decline in New Home Construction. The result is a continuing increase in New Home supply that is greater than demand. The increase in supply will most certainly continue to drive prices downward.
![](http://i27.photobucket.com/albums/c190/unlawflcombatnt/6-26-06grphNHSlsCensCtrsd.gif)
The actual raw monthly numbers show a much larger slowdown. The actual month-to-month slowdown comparisons are February 2006 vs. February 2005, sales decreased 23 %. March 2006 vs. March 2005, sales declined 16%. April 2006 vs. April 2005, -10%. May vs. May, -5%. The year-to-date decline in New Home Sales compared to the previous year is almost 11%. All of this can be seen below on the following modified chart from the U.S. Census Bureau.
![](http://i27.photobucket.com/albums/c190/unlawflcombatnt/6-26-06grphNHSlsCensRawCtrst.gif)
Below is a graph from Briefing.com that shows a noticeable slow down in New Home price appreciation.
![](http://www.briefing.com/Common/Images/Content/PageContent/EcData/price.gif)
It's also noteworthy how monthly New Home Sales are almost universally over-stated. Following the original publication of a month's New Home Sale number, that number is usually revised downward. In fact, going back to December 2005, the total downward revisions to New Home Sales figures is a whopping 339,000. This is a huge revision when considering May's annualized New Home Sale rate was 1.234 million. By downwardly revising each months original number, it has been possible to make it appear that each following month's sales number represents an improvement. Below is a composite copy of several months' original New Home Sales numbers that were published by Briefing.com, starting with December 2005. Notice how earlier months' estimates have been revised lower. October's initially published annualized New Home Sales rate of 1.404 million was revised downward to 1.345 million. November's initially published annualized New Home Sales rate of 1.245 million was revised downward to 1.237 million. December's original rate of 1.298 million was revised down to 1.266 million. January's was revised downward 3 times from the original 1.233 million ultimately to 1.173 million/year. February's original 1.080 million was revised down to 1.038 million. March's original 1.213 million was revised down to 1.114 million . April's 1.198 million down to 1.180 million. The sum of the above mentioned reductions totals -339,000.
(The graphic below is actually a composite of 5 separate reports from Briefing.com, taken on successively more recent dates starting on the top with December 2005, with the last one on the bottom coming from 6-26-06.)
![](http://i27.photobucket.com/albums/c190/unlawflcombatnt/6-26-06grphHsngNHScompX1.gif)
The housing market is slowing, and slowing rapidly, despite today's report. Previous months' New Home Sales reports are universally lower than initially reported by the U.S. Census Bureau. Furthermore, there appears to be much less decline in New Home Construction. The result is a continuing increase in New Home supply that is greater than demand. The increase in supply will most certainly continue to drive prices downward.