New Home Sales Plunge 14.5%; It's Not the Weather; Steen Jakobsen on Consensus vs. Reality

The Census Bureau report New Residential Sales Report shows sales of new single-family houses in March 2014 were at a seasonally adjusted annual rate of 384,000.

• Sales are 14.5 percent below the revised February rate of 449,000
• Sales are 13.3 percent below the March 2013 estimate of 443,000
• Median sales price was $290,000 vs. $260,900 in February, $257,500 in March of 2013
• Average sales price was $334,200 vs. $318,900 in February, $300,200 in March of 2013
• Median sales price was up 11.5% from last month, 12.6% from year ago
• Average sales price was up 4.8% from last month, 11.3% from year ago
• New houses for sale was 193,000
• Supply is 6.0 months at the current sales rate

Sales by Region (Month-Over-Month, Year-Over-Year)

Northeast +12.5% MOM, -22.9% YOY
Midwest    -21.5% MOM, -17.7% YOY
South        -14.4% MOM, -03.8% YOY
West         -17.7% MOM, -27.9% YOY
Total         -14.5% MOM, -13.3% YOY

It's Not the Weather

USA Today noted "Harsh winter weather helped hold down sales in February and may have in March as well."

Also note: "Economists had predicted an annual rate of 450,000 for March, according to the median forecast in Action Economics survey."

My question: If sales decline was weather related, then why were sales up in the Northeast?

I suggest the Fed managed to blow another housing bubble, especially in California and the West where sales are down the most. With rising rates, people are priced out of the market.

Steen Jakobsen on Consensus vs. Reality

Steen Jakobsen, chief economist at Saxo Bank tweeted "Housing tanks again - according to consensus housing should add 0.5%-0.8% to GDP in the US in 2014"



Steen: "Consensus is looking for 0.5% to 0.8% positive GDP from housing. Pity the opposite is happening ... and that on a day when 100% of economists in recent survey by Jim Bianco see US rates higher in six months! Yes, 100%."

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com