New home sales rose 9.6% month-over-month (m/m) in January, to an annual rate of 468,000 units-the highest level since July 2008-from December's upwardly revised 427,000 unit pace, from the initially reported 414,000 rate. Economists surveyed by Bloomberg had expected a decline to a 400,000 rate for last month. Within the report, the median home price was up 3.4% y/y but 2.2% lower m/m at $260,100. The inventory of new homes was 23.5% higher y/y, but unchanged m/m, at 184,000 units. This represents 4.7 months of supply at the current sales rate, from 5.2 months in December and 3.9 in January 2013. New home sales are considered a timely indicator of conditions in the housing market as they are based on contract signings instead of closings. Regionally, m/m sales were higher across most regions, led by a 73.7% surge in the Northeast, but sales in the Midwest fell 17.2%. Compared to the same period a year ago, sales in the Northeast and South were higher, while sales in the Midwest and West were lower.
Schwab Closing Market View, 2/26/14
*** [then again, comes this from Credit Suisse..]
Reported new home sales up a questionable 10% in January; inconsistent with actual market trends: The Census Bureau reported new home sales of 468,000 in January, an increase of 10% from 427,000 homes in December (revised up 3% from 414,000 homes originally reported). This is well above our expectation for 385,000 homes and consensus for 400,000 homes, and again points to both the volatility (confidence interval was +/- 18%) and the lack of credibility for this Census Bureau report. Trends in sales typically follow trends in construction, and single-family starts fell 16% in January. Especially amusing is the reported 74% increase in the Northeast, which appears odd given the weather. We would expect January sales to be revised in the coming months.
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