Happy Happy Spin Cycle, Corrected
As CEPR points out, the mainstream press putting spin on July's dismal new home sales (by claiming, very incorrectly, that July was merely the first month after the expiration of the new homebuyer tax credit - so that it was "not really that bad") are doing just that: spinning.
CEPR
The Plunge inJuly New Home Sales Was Not Due to the Expiration of the Tax Credit
In an article reporting on the plunge in new home sales reported for July, the NYT wrongly told readers that "July was the first month that home buyers could no longer qualify for a tax credit of as much as $8,000, which analysts said may have contributed to the decline." The end of the tax credit was a major factor in the plunge in existing home sales reported on Tuesday, but not the drop in new home sales.
The existing homes series refers to the closings on existing home sales. These sales were typically contracted 6-8 weeks earlier. While the homes that were closed in June likely qualified for the homebuyers tax credit, this would not be true of the existing homes that closed in July.
However the new home sales refer to contracts signed for selling new homes. May, not July, was the first month in which contracts would not qualify for the tax credit...
Econoday.com
Released on 8/25/2010 10:00:00 AM For Jul, 2010 PriorConsensusConsensus RangeActual New Home Sales - Level - SAAR330 K340 K310 K to 350 K276 K Highlights
The mid-year dip that everyone expected following the April expiration of second-round housing stimulus is proving to be very deep. Yesterday's existing home sales report came in far below expectations as did today's new home sales report.
New home sales fell 12.4 percent in July to a record low 276,000 unit annual rate. Like the existing home sales report, declines swept all regions. Also like the existing home sales report, supply rose steeply, to 9.1 months from June's 8.0 months. Unlike yesterday's report, prices for this report show weakness. The median price is down 6.0 percent to $204,000 for a minus 4.8 percent year-on-year comparison. The median price is the lowest since 2003...
Calculated Risk
New Home Sales Decline To Record Low In July
The second graph shows New Home Sales vs. recessions for the last 47 years. Sales of new single-family houses in July 2010 were at a seasonally adjusted annual rate of 276,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.4 percent (±10.8%) below the revised June rate of 315,000 and is 32.4 percent (±8.7%) below the July 2009 estimate of 408,000.
CEPR
The Plunge inJuly New Home Sales Was Not Due to the Expiration of the Tax Credit
In an article reporting on the plunge in new home sales reported for July, the NYT wrongly told readers that "July was the first month that home buyers could no longer qualify for a tax credit of as much as $8,000, which analysts said may have contributed to the decline." The end of the tax credit was a major factor in the plunge in existing home sales reported on Tuesday, but not the drop in new home sales.
The existing homes series refers to the closings on existing home sales. These sales were typically contracted 6-8 weeks earlier. While the homes that were closed in June likely qualified for the homebuyers tax credit, this would not be true of the existing homes that closed in July.
However the new home sales refer to contracts signed for selling new homes. May, not July, was the first month in which contracts would not qualify for the tax credit...
Econoday.com
Released on 8/25/2010 10:00:00 AM For Jul, 2010 PriorConsensusConsensus RangeActual New Home Sales - Level - SAAR330 K340 K310 K to 350 K276 K Highlights
The mid-year dip that everyone expected following the April expiration of second-round housing stimulus is proving to be very deep. Yesterday's existing home sales report came in far below expectations as did today's new home sales report.
New home sales fell 12.4 percent in July to a record low 276,000 unit annual rate. Like the existing home sales report, declines swept all regions. Also like the existing home sales report, supply rose steeply, to 9.1 months from June's 8.0 months. Unlike yesterday's report, prices for this report show weakness. The median price is down 6.0 percent to $204,000 for a minus 4.8 percent year-on-year comparison. The median price is the lowest since 2003...
Calculated Risk
New Home Sales Decline To Record Low In July
The second graph shows New Home Sales vs. recessions for the last 47 years. Sales of new single-family houses in July 2010 were at a seasonally adjusted annual rate of 276,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.4 percent (±10.8%) below the revised June rate of 315,000 and is 32.4 percent (±8.7%) below the July 2009 estimate of 408,000.