Surprise! For the 3rd time in the last 20 years, homebuilder sentiment got way ahead of reality… and as the February NAHB data shows, reality is starting to catch up to them. The NAHB sentiment index crashed by its most on record in Feb, missed expectations by its most on record, and fell back below the crucial 50-level, as it starts to play cyclical catch-down to home sales and mortgage apps. Think it's the weather? nope…It's across every region (with The West dropping the most on record – hot dry weather?) And this after Trulia (that entirely independent provider of perspective) said " Severe winter weather may cause housing activity to wobble, but cold, rain, and snow won’t hobble the housing recovery." It appears it has…
Yet again hope fades…
Biggest miss and biggest drop on record….
The West dropped more than the cold-weather-affected areas of the country – we assume that warm, dry weather is detrimental to home-buying in some way?
And here's what Trulia told everyone…
Winter Weather is a Wobble, not a Hobble
Here’s what the weather wobble means for interpreting the forthcoming January construction and sales data. Because the weather had a slight negative impact on housing activity, flat month-over-month numbers for construction or sales would mean that other market forces were strong enough to offset the negative effect of bad weather. But if housing activity fell month-over-month in January by more than the predicted weather effect, don’t pin the entire drop on the cold.
That means if existing home sales fall by 5% month-over-month in January, for example, then only a bit of decline (1.1%) should be blamed on weather. The regional patterns in housing activity will also help reveal whether weather mattered. The impact of January’s weather on starts should be most negative in the Northeast and Midwest, so if starts decline most in the South and West, then weather’s not the culprit. Finally, housing activity tends to bounce partway back the month after bad weather (unless that next month is unusually bad, too). Rain and cold don’t last forever, and neither do their effects on housing.
Therefore, bad winter weather will only delay some construction and sales activity, rather than make it disappear. Severe winter weather may cause housing activity to wobble, but cold, rain, and snow won’t hobble the housing recovery.
A 10-sigma wobble!!!!
via Zero Hedge http://ift.tt/1bIynok Tyler Durden