New home sales allegedly rose in December and January. The rise is overstated, assuming it happened. And if it happened, it would not last.

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New Home Sales data from the Census Department, chart by Mish

There were still more revisions in the Census Bureau's New Home Sales report.

• New Home Sales Sales of new single‐family houses in January 2023 were at a seasonally adjusted annual rate of 670,000. This is 7.2 percent (±20.4 percent) above the revised December rate of 625,000, but is 19.4 percent (±13.1 percent) below the January 2022 estimate of 831,000. 
• Sales Price The median sales price of new houses sold in January 2023 was $427,500. The average sales price was $474,400. 
• For Sale Inventory and Months’ Supply The seasonally‐adjusted estimate of new houses for sale at the end of January was 439,000. This represents a supply of 7.9 months at the current sales rate. 

The margins of error speak for themselves. Sales rose 7.2 percent plus or minus 20.4 percent. Revisions are massive every month. Here is a revision chart that I posted in December.

November 2022 Report

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November Preliminary Numbers and Revisions

• The November preliminary number was 640,000.
• August from 661,000 to 646,000
• September from 580,000 to 559,000
• October from 632,000 to 605,000

January Preliminary Numbers and Revisions

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A quick check shows September, October, and November were all revised lower. November went from 640,000 posted in November to 583,000 posted in January. 

Hooray, this allowed for a reported jump in December followed by another jump in January. 

New Home For Sale by Stage of Construction

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Housing by stage of construction is another amusing chart.

Stage of Construction Details

• Of the purported 439,000 homes for sale, 91,000 have not even started, nor are they likely to in this environment. A mere 67,000 are actually completed.
• To be generous, there are 348,000 homes for sale, that have at least been started, with 280,000 under construction and a mere 67,000 actually completed.

What About Cancellations?

The Census Department does not subtract cancellations from its reports and cancellations due to rising mortgage rates have been huge.

To repeat, none of these revisions include cancellation and cancellation rates have been as high as 25 percent!

In declining sales environments and economic downturns (now), the Census Department dramatically overstates sales, even if we ignore revisions.

In economic upturns, the Census Department understates sales. 

November Hooray Flashback

Looking back to the Census Bureau's November report published in December, I then commented "Hooray, we have a reported 5.8 percent rise in new home sales in November." 

Today we can see the that the alleged 5.8 percent rise in November is really a 1.0 percent decline.

Q: Really? 
A: No, not really. These numbers a so revised and more importantly so wrong that it's ludicrous to treat these reports as anything more than a total joke. 

The numbers are all flat out wrong because they do not include cancellations. 

Whatever bounce there was, if indeed any at all, will not last because mortgage rates are headed back up. 

I comment on Census Bureau new housing reports primarily as a public service announcement of how screwed up the reporting is. 

No Rebound in Existing Home Sales Despite a Drop in Mortgage Rates

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Existing home sales from the National Association of Realtors via St. Louis Fed

For a more realistic view of the current state of housing, please consider No Rebound in Existing Home Sales Despite a Drop in Mortgage Rates

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