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[Selling MOM Out] Month Over Month, ‘Cause It Looks Better

Ok so we see an endless parade of housing stats (guilty as charged) and lately the news seems to be better, no?

The Federal Housing Finance Agency released their stats (covering conventional mortgage data – sub $729k mortgages) – They used a month over month headline:

U.S. Monthly House Price Index Estimates 1.7 Percent Price Increase From December to January [1]

U.S. home prices rose 1.7 percent on a seasonally-adjusted basis from December to January, according to the Federal Housing Finance Agency’s monthly House Price Index. December’s previously reported 0.1 percent increase was revised to a 0.2 percent decline. For the 12 months ending in January, U.S. prices fell 6.3 percent. The U.S. index is 9.6 percent below its April 2007 peak.

Jan-Feb % change spiked last year and did the same this year, but somewhat higher. Here’s a look by Justin Fox at Curious Capital [2].

However, quarterly showed a large fall off in 4Q 08 so it will be interesting to see how Q1 09 shakes out.

The National Association of Realtors released their Existing Home Sale Report yesterday. They used a month over month headline:

Existing-Home Sales Rise In February [3]

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.1 percent to a seasonally adjusted annual rate1 of 4.72 million units in February from a pace of 4.49 million units in January, but are 4.6 percent below the 4.95 million-unit level in February 2008. Seasonal adjustment factors are more volatile in winter months, but sales rates over the past few months show dampened sales activity.

In other words, existing home sales are lower than last year. However, Calculated Risk [4] and Chris Martenson [5] counters NAR spin showing that the 5.1% increase is pretty ho-hum.

New Home Sales stats are being released Wednesday [6] and consensus is a pace of 300k down from 309k last month.


The S&P/Case Shiller Indices are being released in a week (March 31) but not turn is predicted.

Conclusion?
What does all of this mean? It means that there remains enormous spin from trade groups and government agencies. It means that consumers need to be skeptical of month over month gains because of seasonality.

Is there a possibility that housing is improving nationally? Not really but hope is a powerful thing that I try to consider month to month.