November New Home Sales Down 11.3% (with +/-11% margin for error)

Sales of new (as opposed to existing) single family homes for November occurred at a seasonally adjusted rate of 355,000 according to joint estimates by the US Census Bureau and HUD. This is 11.3% below the October numbers, which were revised to 400,000, and is 9% below the November 2008 estimate of 390,000. Median new home prices for homes sold in November was $217,000 and average sale price was $280,300. There are an estimated 235,000 new homes for sale at the end of November, representing a 7.9 month supply at current sales rates.

These data, released by the Commerce Department, get reaction from markets and media, but they’re always subject to major revisions over the month that follow. For example, even the official release of today’s numbers show massive margin for error. The -11.3% number is cited with +/-11% margin for error, and the -9% number is cited with +/-15.3% margin for error. With margins this wide, interpretation is equally wide. For example, yesterday’s existing home sales from NAR were up 7.4% and the original November expiration of the tax credit was cited as a big contributor to this gain. Then today, the expiration of the credit was also cited for today’s big loss on new home sales. As with any statistics, one could argue any point of view (see any of our national cable news networks for reference), but the unreliability of these statistics in their early form just makes the issue more pronounced.