US New home sales data came out this week and it got a lot of people excited. In particular, the hike in the annualised sales to December seemed to suggest better days. For the record, the number went from 280k in November to 329k. An impressive increase.
Unfortunately, on deeper inspection, it is not that good. Much of the increase was due to a large jump in sales in California because purchasers were rushing to meet a tax credit deadline in the State. Looking closer at the numbers for annualised sales...
US 3 Month Av
source: US Census Bureau, Earnings View
....reveals that the data is not so impressive. Excluding the West region shows that the three month average actually fell. Moreover, even if the West is left in, the three month average is only marginally up.
Inventories are coming down but it looks like the housing recovery still hasn't taken place yet.
U.S. Census Bureau News