Ah, what a classic day for the propaganda machine in full force.
I opened CNBC.com this morning to check the new home sales numbers for the previous month and I was hit with the banner headline right across the top:
"New US Home Sales Surge In June, Inventory at 42 Year Low."
Wow. Now that is some good news. But just in case the news may have been spun just a tad, I decided to take a deeper look at the numbers. Here's what I found:
Last month (data for May) we received the lowest new home sales number in history. It was beyond horrifying. We found out this morning that the number was revised down! By 33,000 sales to 267,000.
The US Homes Sales "Surge" was a month over month increase up to 330,000. This was the lowest June sales number in history.
Please remember this comes with the gift of the lowest mortgage interest rates in US history. Here is where the monthly sales number stands on a long term chart:
The "42 year low" inventory number is due to home builders having no access to credit to build spec houses. I continue to confirm this with multiple people I know selling new homes, who say their builder would love to build inventory homes but have no access to financing.
Those same sources are telling me to brace myself for the July numbers that will be released next month.
If you want a real discussion on real estate inventory please see The True Supply Of Homes.