I want to direct your attention at two items related to New Home Sales: The chart below, and a post from 2005:
First, the post: New Home Sales Data: Don’t rely On It Either New Home Sales, which depend in large part on wself-reporting to Census from Home builders, are not especially reliable. There is a get to it next month quality that means any given month’s data can be wildly off. You are much better off taking a moving average of three months rather than relying on a single monthly data point.
Second, have a look at the trend of the New Home Sales chart: If you doubted my statement this morning that home prices remain overvalued, the chart makes that issue clear. Why buy a brand new home when 2 year old existing homes are selling for so much less?
Take a look at the historical peaks and valleys in the 1960s, 70s, and 80s. That changed in the 1990s — it broke out to a new level — a combination of population growth and a booming stock market led to some profit rotation from Equities into Real Estate.
The final phase was an entirely different order of magnitude . . .
The Residential Real Estate Ugliness in One Chart
New Home Sales Data: Don’t rely On It Either (November 30th, 2005)
Should You Buy a Home? Looking (Again) at Housing (March 23, 2011)
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.