Did U.S. home sales fall? That de­pends

Financial Mirror (Cyprus) - - FRONT PAGE -

We’ve ac­tu­ally got­ten a big dose of eco­nomic news while no­body was look­ing last week, but there’s one piece of in­for­ma­tion in par­tic­u­lar is worth a closer in­spec­tion at this time... an over­view of last month’s home sales pace.

You may have al­ready heard, but if not, the Novem­ber new-home sales pace moved from 470,000 to a pace of 490,000 per year. That still missed es­ti­mates of 505,000 though. Ear­lier in the week, we heard the pace of ex­ist­ing-home sales slumped from 5.32 mil­lion to 4.76 mil­lion in Novem­ber, also miss­ing es­ti­mates of 5.3 mil­lion.

The news isn’t good on the sur­face, and with just a quick glance at the ex­ist­ing-home sales trend chart, it’s al­most a lit­tle alarm­ing. The more we look at the long-term data of both, how­ever, the bet­ter we feel.

Last month’s ex­ist­ing home sales-pace plunge was rat­tling. Just for the record, though, the to­tal num­ber of home sales be­tween new and ex­ist­ing houses in Novem­ber - the un­ad­justed to­tal - was bet­ter than the to­tal of the two seen in Novem­ber of last year. That’s an im­por­tant de­tail to note. The “sea­sonal ad­just­ment” is sup­posed to smooth out the data and make it re­flect a dis­cernible trend. This ad­just­ment of the raw data, how­ever, can some­times skew the chart.

We can’t help but won­der if that’s what hap­pened above, be­cause when we look at the raw data for ex­ist­ing home sales be­low through last month com­pared to the an­nu­al­izsed and sea­son­ally-ad­justed fig­ure above, we’re not sure the two charts lead to the same con­clu­sion. All the Novem­bers are marked with ar­rows.

Lastly, there’s the same version of the new-home sales charts. Looks like Novem­ber is sup­posed to be the low point of the year here too, but even this most re­cent Novem­ber is just an­other im­prove­ment on the prior Novem­ber.

Per­haps that’s the long way of say­ing “I’m not sweat­ing this week’s su­per­fi­cial lull in Novem­ber home sales”. It’s also a warn­ing that you have to be very care­ful about jump­ing to con­clu­sions when the head­lines ref­er­ence data that’s been sea­son­ally ad­justed. (Source: Small­Cap Net­work)

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.