by Bill McBride on 4/26/2006 11:50:00 AM
Wednesday, April 26, 2006
Is housing slowing? Looking at New Home Sales, the answer is unequivocally yes.
Click on graph for larger image.
New Home Sales for 2006 are below both 2004 and 2005. In February I cautioned "One month does not make a trend, but New Home Sales have fallen in six of the last seven months."
That same caution applies to the March numbers. New Home Sales have now fallen six of the last eight months - a definite down trend. But 2006 is still the third best year so far.
This graph (from the previous post) shows the reported sales (NSA) by month for the last four year. For each month, sales for 2006 have been below 2005.
The reason I follow housing so closely is I expect a slowing housing market to impact the economy.
However, as I wrote last month, "I'd be very concerned if New Home Sales fall below about 1.05 million units annual rate for several months." That hasn't happened for even one month yet.