Durable goods

Evaluation of Market Bottoming Evidence

 The most recent chatter concerning evidence of a market bottoming pattern is widespread in nature, occurring in both financial and traditional media outlets. The impetus for this new found optimism was the release of several economic data points throughout the past week, and subsequent media analysis of the chart pattern formed by the inclusion of these data points.

Nominal New Home Prices Plunge

Nominal new home prices plunge record -15.1% yr/yr to January yet sales plunge and inventories soar; durable goods orders also plunged in January.

The key finding in today’s Census Bureau report on new single-family home sales in January is that the median nominal price plunged -15.1% yr/yr, the worst decline on record back to 1963. New home prices were down -7.8% in the year ending December 2007.

Also very important is that the inventory of unsold new homes soared to a 9.9 month supply in January, the worst glut of empty new homes since October 1981. Unsold inventories represented a 9.5 month supply in December and a 7.2 month supply in January 2007.

Housing Prices, Histogram

unsold homes, inventory, histogram