The New Homes Sales Report Is A Complete Farce

investmentresearchdynamics.com / David Kranzler / October 24, 2014

Gyrating wildly month-to-month, as seen also with the extreme and unstable monthly reporting of the housing-starts series headline August new-home sales rose by an incredible 18.0% for the month. Even more incredible—as to why the Census Bureau even bothers to publish the current detail—a headline monthly gain of that magnitude was not statistically-significant. – John Williams, Shadowstats.com.

Well guess what? The Census Bureau reported new home sales for September and revised the original number for August down by 38,000, or 7.5%. Recall, the same thing happened in June, when May’s unbelievably high number reported was pole-axed by almost 10%. The data collection and seasonal adjustment algorithms produce a monthly statistic that is vomited out by both the Census Bureau and the National Association of Realtors (existing home sales). Then they compound this grotesque abortion by reporting an “annualized rate” for each month. It’s a complete and utter farce.

I review this month’s statistical aborticide in this article published by Seeking Alpha:September New Home Sales.

One thing to keep in mind: the data both the NAR and the Census Bureau collect are just samples.

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