| Be Thankful 2008 Is Almost Over |
| Written by Jonathan Smoke | |
| 11.26.2008 | |
|
Discuss this article on the forums. (0 posts) The Commerce Department reported preliminary new home sales for October today. Sales of new single family homes were reported at a seasonally adjusted annual rate of 433,000 units in October 2008, which was 5.3% below the revised lower rate of 457,000 units in September. As the data is collected by survey sampling, the decline was substantially within the margin of error, so it’s not statistically significant. That simply means we really don’t know if it was lower, higher or more or less the same. So don’t get hung up on quoting the decline percentage. The decline over 2007 was statistically significant. The October 2008 rate was 40.1% below the October 2007 rate of 723,000 units. Therefore, we can definitively say that 2008 is turning out to be a very horrible year for new home sales. Be thankful the year is almost over. According to Dow Jones Newswires’ survey of economists, somehow they were expecting a lesser decline. Hello!? Did they not remember how dour October was? Credit conditions and consumer confidence tanked in October. Builders have been super depressed in their sentiment readings and with what they are seeing in traffic. Indeed until the latest government actions this week have lowered mortgage rates, consumers have had little reason to buy a new home. Too little, too late for a bad time of the year to sell homes. Don’t expect numbers to be better in November or December. With the ever declining sales pace, the seasonally adjusted estimate of new homes available for sale at the end of October was 381,000 units or a supply of 11.1 months at the current sales pace. Hopefully we are setting the stage for a clear bottom to be reached in January, much as we did in January 1991, when an even lower rate of 401,000 new home sales was recorded. Data on new home sales has been recorded since 1963. The recorded low was 338,000, which was set at the bottom of the 1981-1982 downturn. So for the rest of this week, focus on family and friends, enjoy some turkey and football. Be thankful for what you have and for life's little blessings, and be thankful this dismal year is nearing its close. 
We're always looking for feedback from our readers.
|
| < Prev | Next > |
|---|
