The headlines blared this fact.
Of course new home sales fell in October. September ends summer every year. Home sales usually decline in fall and winter.
Seasonal activity affects real estate demand.
We will have to wait until late spring to see if the real estate recovery is sustained.
Sales were down slightly: 0.3% from September. This was an annual pace of 368,000. It was 369,000 in September.
When assessing the meaning of any statistic, we need some sense of the past. We need to know the direction of movement. We rarely get this in news reports.
In 2005, annual new home sales were about 1.3 million. In 2006, the total was 1.1 million.
In short, new home sales are rotten. They are just less rotten than in 2011. But not by much.
The optimism index of new home builders is at 38. Optimism begins at 51. It was at 9 in 2009. It was under 20 in late 2011. So, there is growing optimism. But the industry remains pessimistic.
