New Home Sales-2nd worst on record and down 29% year-over-year

2nd worst new home sales figure on record, 8.6 month supply of new homes coupled with a 12 month supply of existing home inventory, median price of new homes not seen since December 2003 and the U.S. Equity Market Launches nearly 2%. The Great Disconnect continues.

NEW RESIDENTIAL SALES IN AUGUST 2010

Census Bureau and Dept. of Housing and Urban Development

Sales of new single-family houses in August 2010 were at a seasonally adjusted annual rate of 288,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

This is unchanged from the revised July rate of 288,000 and is 28.9 percent below the August 2009 estimate of 405,000.

The median sales price of new houses sold in August 2010 was $204,700; the average sales price was $248,800. The seasonally adjusted estimate of new houses for sale at the end of August was 206,000. This represents a supply of 8.6 months at the current sales rate. Full Report

Alan Zibel, AP Real Estate Writer

WASHINGTON (AP) -- Sales of new homes had their second-worst month on record in August, signaling that the housing market will remain a drag on the economy.

Last month's new home sales were unchanged from a month earlier at a seasonally adjusted annual sales pace of 288,000, the Commerce Department said Friday. Sales were down by 29 percent from the same month a year earlier.

Normally the building industry powers economic recoveries. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

But housing has been at the center of this downturn and it shows no signs of recovering quickly.

The only time new home sales were slower was in May, when the sales pace was 282,000. That's the worst pace on records dating back to 1963. July's results had been the worst on record, but were adjusted upward.

High unemployment, tight credit and uncertainty about home prices have kept people from buying homes. Government tax credits boosted the market earlier in the year, but those expired in April.

The median sales price in August was $204,700. That was down 1.2 percent from a year earlier and the lowest since December 2003. AP Article

FHFA reports House prices drop 0.5% during August and a huge downward revision for July

WASHINGTON, DC – U.S. house prices fell 0.5 percent on a seasonally adjusted basis from June to July, according to the Federal Housing Finance Agency’s (FHFA) monthly House Price Index. The previously reported 0.3 percent decline in June was revised to a 1.2 percent decline. The unusually large revision mainly reflects the addition of new data from late June that show considerably weaker prices than earlier in the month. For the 12 months ending in July, U.S. prices fell 3.3 percent. The U.S. index is 13.8 percent below its April 2007 peak.

The FHFA monthly index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac. For the nine Census Divisions, seasonally adjusted monthly price changes from June to July ranged from -1.6 percent in the South Atlantic Division to +1.1 percent in the Pacific Division.

The regulator's index is calculated by using purchase prices of houses financed with mortgages sold to or guaranteed by mortgage finance companies Fannie Mae or Freddie Mac.

Sept. 22 (Bloomberg)

U.S. home prices dropped 3.3 percent in July from a year earlier, the eighth consecutive decline, as foreclosed properties flooded the market.

Prices fell 0.5 percent from June, the Federal Housing Finance Agency in Washington said in a report today. Economists had projected a 0.2 percent decline from the previous month, based on the average of 15 estimates in a Bloomberg survey.

Foreclosures are boosting the supply of available properties and reducing prices, even as mortgage rates tumble to record lows. The time it would take to clear the market of homes for sale was 12.5 months in July, the highest in more than a decade of data, according to the National Association of Realtors. Banks seized a record 95,364 properties from delinquent borrowers in August, according to RealtyTrac Inc., an Irvine, California-based seller of housing data.

“We have a lot of homes for sale, and a lot of them are distressed properties,” said Thomas Lawler, founder and president of Lawler Housing and Economic Consulting in Leesburg, Virginia. “That is putting downward pressure on home prices.”

Sales of existing homes in July plunged 27 percent to a 3.83 million annual pace, the lowest level on record, NAR said Aug. 24. July sales of new homes dropped to an annual pace of 276,000, the fewest since data began in 1963, the Commerce Department reported Aug. 25.

Diana Olick recaps the New Home Sales Report

Diana Olick of CNBC (who remains one of the few worthy of watching) recaps today's New Home Sales results which basically stunk. She also notes the discussion of the potential of mergers and acquisitions within the publically traded homebuilder stocks. OF COURSE there is discussion as what is left to move up the stocks? One larger homebuilder in a downward spiral market is better than two smaller homebuilders in a downward spiral market....this is how the Wall Street folks get their "important" clients out of a losing position at a higher price.

Welcome to the Recovery...a collection of Timmy Geithner's favorite Folktales

After consuming mass quantities of Timmy's home brewed Kool-aid, he penned an op-ed  folktale piece in the New York Times. Yes, Timmy lives in his own special world talking to his imaginary friends while perusing his imaginary economic reports.

Welcome to the Recovery

A collection of folktales

The devastation wrought by the great recession is still all too real for millions of Americans who lost their jobs, businesses and homes. The scars of the crisis are fresh, and every new economic report brings another wave of anxiety. That uncertainty is understandable, but a review of recent data on the American economy shows that we are on a path back to growth.

The recession that began in late 2007 was extraordinarily severe, but the actions we took at its height to stimulate the economy helped arrest the freefall, preventing an even deeper collapse and putting the economy on the road to recovery.

From the start, President Obama made clear that recovery from a crisis of this magnitude would not come quickly and that the recovery would not follow a straight line. We saw that this past spring, when the European fiscal crisis posed a serious challenge to the markets and to business confidence, dampening investment and the rate of growth here.

While the economy has a long way to go before reaching its full potential, last week’s data on economic growth show that large parts of the private sector continue to strengthen. Business investment and consumption — the two keys to private demand — are getting stronger, better than last year and better than last quarter. Uncertainty is still inhibiting investment, but business capital spending increased at a solid annual rate of about 17 percent.

Together, private consumption and fixed investment contributed about 3.25 percent to growth. Even the surge in imports, which lowered the rate of increase of G.D.P., actually reflects healthy and growing American demand.

The economic rescue package that President Obama put in place was essential to turning the economy around. The combined effect of government actions taken over the past two years — the stimulus package, the stress tests and recapitalization of the banks, the restructuring of the American car industry and the many steps taken by the Federal Reserve — were extremely effective in stopping the freefall and restarting the economy.

We suffered a terrible blow, but we are coming back. Link to Geithner's Folk Tales

Updated Economic Data reported post Folk Tales Publication

Pending Home Sales June 2010 (National Association of Realtors)

The Pending Home Sales Index,* a forward-looking indicator, declined 2.6 percent to 75.7 based on contracts signed in June from an upwardly revised level of 77.7 in May, and is 18.6 percent below June 2009 when it was 93.0. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

Factory Orders (June 2010)

Factory orders for the month of June were DOWN 1.2% versus a consensus estimate of down 0.5%. May was revised (of course) to DOWN 1.8% from the initial government guesstimate of DOWN 1.4%. April was also revised (government required 3 months to check their math) to UP 1.0% versus the initial report of UP 1.2%.

Sampling of Other Popular Geithner Folktales and Fables

New Home Sales June 2010 330,000 and HUGE revisions to prior 3 months

New home sales reported by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development were 330,000 annualized units for the month of June 2010. The Red Bull drinking, manipulating gamers love the number as it beat the 310,000 concensus estimate. This figure is the worst on record (1963). May 2010 was revised from 300,000 annualized units to 267,000 which is a record. This is a 33,000 (11%) revision and the Census Bureau also revised the April and March 2010 figures.

Another Red Bull sir? June beats estimates by 20,000 and May revised lower by 32,000 units. Grandpa is old school however I believe 20,000 minus 32,000 does not generate anything positive.

Recap

June
330,000 annualized units...naturally a revision to follow in a month (maybe to 295k?)

May
300,000 annualized units initially reported 6/23/10
267,000 revised down 33,000 in 7/26/10 report

April
504,000 annualized units initially reported 5/26/10
446,000 revised down 58,000 in 6/23/10 report
422,000 revised down another 24,000 in 7/26/10 report

March
411,000 annualized units initially reported 4/23/10
439,000 revised up 28,000 in 5/26/10 report
384,000 revised down 55,000 in 7/26/10 report

Our Census Bureau is clearly mathematically challenged. Total downward revisions from the initial reports for March , April and May clock in at 142,000 annualized units. This equates to an average monthly downward revision of 47,333 annualized units.

Once again, the U.S. manipulated equity market continues its insane march to higher levels as the algorithmic gamers chase equities like a dog with its tail.