July 26, 2010: Housing Inventory at a 42 Year Low?
July 26th, 2010
That’s right…good news, real-estate owners and investors….in the latest government report on New Home Sales (for June) which came out this morning at 10:00 EST, sales spiked 23.6% from May’s level.
Just to fill in some gaps….
May’s New Home Sales figure was originally reported at 300,000 (seasonally adjusted annual rate) which was the lowest rate on record, according to Bloomberg. Even that figure did not tell the whole story. In today’s report, May’s record low pace of 300,000 was revised to 267,000. Further, April New Home Sales were revised down from 504,000 to 422,000 and March New Home Sales were revised down from 411,000 to 384,000. That makes the total downward revision during those three months 142,000 or 11.69% lower than what was originally reported.
Comparing revised and original data to prior month’s revised and original data shows the following: March’s sales grew by 10.7% (originally reported at +33.4%), April’s sales grew by 9.9% (originally reported at +22.6%), and May’s sales were -36.7% (originally reported at -40.5%).
Still, June’s sales of +23.6% is a gain rather than a loss and despite June New Home Sales being the second slowest pace on record, investors are keenly focusing on good news and aggressively explaining away bad news.
According to Reuters, the sales spike in June took available inventory to a 42-year low of 7.6 months. Given that the three months prior were substantially revised lower, it’s anyone’s guess whether or not June data is “real”.
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