Real Estate Pollyanna Poppycock

Ah, the end of a rather uneventful week.. 

Time for more pollyanna poppycock dissecting..

The Commerce Department released its monthly housing report on New Home Sales today.  Here's how Reuters, those Fudging Fudgers reported things:

"New single-family home sales fell in February, but a jump in prices to their highest level in eight months kept hopes alive of a recovery in the housing market... sales slipped 1.6 percent to a seasonally adjusted 313,000-unit annual rate. January's sales pace was revised down to 318,000 units from the previously reported 321,000 units.  Sales for November and December were revised up a bit."

Did you catch that?

See how the negative information was both glossed over and minimized?  How the paragraph finishes with a nice happy ending?

If it was music, it would 'sound' like this..

Buh ba buh And Duh da duh.. BUT.. La La La-La LA LAAA~

Here's what really is going on..  

Against an expectation of a +1.3% gain in February, new home sales fell -1.6% month over month.  So its not simply that homes 'fell' but the differential between "expert" prediction and reality was a drop of 2.9%

Then there's January's data-- that ended up being revised to a massive 5.4% drop month over month.  This is the largest drop in 13 months and the largest downward revision since March 2009.

Reuters also wrote that, "The inventory of new homes on the market was unchanged at a record low 150,000 units last month. At February's sales pace it would take 5.8 months to clear the houses from the market, up from 5.7 months in January."

5.8 months from 5.7 months... how harmless.. 1/10th of a month..

We usually shy away from charts and graphs but...

This is a chart showing new one family homes for sale in the US..  shaded areas on the timeline indicate US recessions. Technically, the chart is in error because the latest recession shading stops at 2009 when in reality it should be shaded into the present and Far beyond...

We are at the very bottom right graph point-- 150,000 New Homes.  Its the lowest since the Department of Commerce started keeping track in the early 1960s..  The lowest Ever.   

In 1964, the US population was 194 million.  Today its 310 million.

With an increase of 116 million people in that span,  over 75k less new homes are being built today vs 1964..  Also compare the number with around 2006-07 when there were around 550k new homes available for sale.  

What does that mean?  1)  There's a housing glut-- too many homes available to purchase, which is causing 2) Housing i.e. building of homes is in a rut; a continual never-ending crawl, which means 3) There is no housing recovery beyond what the government and media is propagandizing.

Wish there was a housing recovery.. a Real one.. but..