With the government shutdown which apparently had zero impact on the economy, moments ago the Census Bureau released not one but two New Home Sales reports together due to the delay in data reporting. The data showed that while in September new home sales declined from 379K to 354K annualized, or the lowest since early 2012, the subsequent rebound sent New Home Sales to 444K, or a 90K increase, +25.4%, in one month was the biggest month over month jump since May 1980! What caused this surge? Possibly it was pent up demand, because as the first chart below shows, an unbroken trendline suggest a modest decline in sales data. However, what was most likely the reason for the increase is that the Median new home sales price tumbled to $245,800, down from $257,400 and well below the recent highs of $279,300. In fact, this was the lost median new price in one year. Supply – meet demand, and equilibrium price.
New Home Sales:
The Sequential change: biggest jump in over 30 years!
And the other variable: Median home prices…. which keeps on sliding.
Finally, it is unclear why stocks soared as a result of this report. It was hardly bad, and all the evidence points to the big Service ISM miss as being the culprit for the stock ramp.
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/nzjPSZFzLgw/story01.htm Tyler Durden