by Calculated Risk on 5/24/2007 06:20:00 PM

For more graphs, please see my earlier post: April New Home Sales

Click on graph for larger image.

The first graph shows New Home Sales vs. Recession for the last 35 years. New Home sales were falling prior to every recession, with the exception of the business investment led recession of 2001. This should raise concerns about a possible consumer led recession in the months ahead.



For Fun: Here is the same graph after the December 2006 sales were reported just a few months ago.

The housing bust was "over".

Ooops!

Once again, this reminds us to take the "just reported" data with a grain of salt.


The third graph compares annual New Home Sales vs. Not Seasonally Adjusted (NSA) New Home Sales through April.

Typically, for an average year, about 35% of all new home sales happen before the end of April. At the current pace, new home sales for 2007 will probably be under 900 thousand - about the same level as the late '90s. This is significantly below the forecasts of even many bearish forecasters.