There has been a lot made out of the flaws in the Department of Labor’s statmill lately and here is another example of it, but this time its much more severe (hat tip to Lanser on Real Estate).
According to John Burns Real Estate Consulting, the recent stats are out of sync with reality. They show a spike in home sales when the construction industry shows a sharp drop. That also correlates with the recent series of reports from home builders [TheStreet.com] in recent weeks. Construction is down because demand is down.
the Census Bureau is reporting that new home sales are only down 6% from one year ago, which we know is incorrect. For accurate new home sales estimates, see the press releases of publicly traded home builders – all of whom are reporting sales (orders) that are down 20% – 40% from one year ago. The NAHB Housing Market Index, as well as almost every industry source we contact each month, supports the fact that sales are down 20%+ from one year ago in more than 70% of the markets we track (Texas, the Carolinas, Georgia and New Mexico are some of the major exceptions).
I hope the Fed sees through this as well when they make their next move (who am I kidding, they will be raising rates at the next FOMC meeting). I hope they are able to see the real estate economy the way it is, not the way it is reported.
Tags: Commerce Dept, NAHB, Census
Demand is down because nobody can afford a home anymore.