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New Home Sales Chart

New Home Sales Growth Slows But Trend Still Up

New home sales growth fell 11.4 percent in March to a seasonally adjusted annual rate of 481,000 units. That was the biggest percent drop in growth since July 2013.

I spoke with a trader today who told me new home sales dropped and the economy is therefore in trouble. Oh man, on some days people just give me a headache.

New home sales are still growing! In fact, 481,000 homes were sold in March. Folks, let’s be clear about something. It is the rate of growth that fell, but the trend is still up.

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Today’s new home sales report shows how important it is to chart the raw data. Charting gives us perspective.

New Home Sales Chart

The stock of new houses available on the market rose 1.9 percent last month to 213,000. Supply still remains less than half of what it was at the height of the housing boom, good news for home builders who will need to ramp up construction.Source: www.cnbc.comopens in a new window

The chart shows that new home sales are still up +19.3% from a year ago. In March of 2014, new home sales came in at 403,000. In March of 2015, they came in at 481,000. How so called “analysts” could interpret this data as “the sky is falling” is beyond me.

The trend on the new home sales chart above is clearly up. We have a big down turn from today’s report BUT think of it like this. If this was a stock chart, would you go all in on the short side in a bet this chart was going to go lower? No, of course not. You would be waiting for a bigger pull back before going short and betting that the market would reverse into a strong downtrend. That’s the same way you should think of the new home sales chart in my opinion.

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