The Commerce Department data for April’s new home sales looks good on the surface, but there are perhaps more problems than there are winnings here. On an annualized basis, there were352,000 new homes sold and a 0.3% gain. Technically this is growth, but it is also under the 365,000 estimate. There was also a revision to the March data down to 351,000, which means that the -0.6% originally reported was really a -3.0% reading.
To show how bad this is, the SPDR S&P Homebuilders (NYSE: XHB) ETF is down almost 5% at $11.46 after the data.
The notion here is that the pent-up demand may be much smaller than many of the ‘greenshoots’ crowd is hoping would be there. To show how poor this is, new home sales are actually off by almost 34% from April-2008.
Median home prices are down almost 15% from last year to $209,700.00 for new homes. The average price came down even more by 19% from a year ago to $254,000.00.
Full Story: http://247wallst.com/2009/05/28/notions-of-housing-recovery-only-seem-relative-to-price-xhb/
