Wednesday, September 27, 2006

New Home Sales Revisions

by Calculated Risk on 9/27/2006 02:52:00 PM

During periods of housing market weakness, the preliminary estimate of New Home Sales from the Census Bureau has consistently been too high.

Click on graph for larger image.

This graph shows the previous 12 months of sales using the preliminary estimate and the final estimate - or most recent estimate for last few months, since final estimate isn't available yet.

NOTE: Graph start at 600 thousand units to better show the difference between the preliminary and final estimates.

During the period of flat sales in 2000 and 2001, the Census Bureau's preliminary estimate was too high. And during the current housing bust, the Bureau's preliminary estimates are once again being revised down.

Today's report was no different. The previous months were all revised down, and the odds are New Home Sales for August will be around or under 1 million units when the final estimate is released.