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The New Home Sales Report came out last Friday, and we were told that December prices were up:
The median home price — half sold for more, half for less — rose to $235,000 in December from a downwardly revised $232,200 in November, the Commerce Department said.
The MSM generally neglected to report it, but while the month over month was up, prices were down 1.5% year-over-year. Also of significance, the MSM has the habit of allowing the old revised numbers to fall into the "black hole" of cyberspace, mentioning "downwardly revised", but not giving the former value. This erases important context and can make the reported rise or fall in price an apples-and-oranges comparison.
The November report made the same claim of rising prices. However in November there was a positive YOY number, so apparently the media managed to squeeze that number in:
The median price of a new home sold last month [November] rose to $251,700, up 3.2 percent from the October level and 5.8 percent higher than a year ago.
Do you see a problem here? Last month’s 3.2% price increase- one of the "signs" we were told showed the market was improving- apparently didn’t happen. The November median price was revised from $251,700 to $232,200 for a 7.7% downward revision. October’s median price (unrevised) was $248,500 or (revised) $243,600- whichever suits your spin. Either way, if you used the revised November number, prices were down from the previous month, not up 3.2%. Year-over-year then, the revised prices were DOWN 2.4% YOY, or 4.7% MOM. These numbers are not adjusted for inflation, and do not reflect builder incentives.
At any rate- Here, for what it is worth, is what the graph looks like: [October and November 2006 numbers have been revised. Data from the Census Bureau.]
It’s an article of faith that "The Big Lie" just doesn’t work in our society. Nevertheless, the level of jawboning [1] [2] [3] that has cropped up recently to support Goldilocks, the soft landing, and a perception of US economic strength has been astonishing, to say the least. My worry is that either a whole lot of commentators who know more about this stuff than I ever will have completely lost touch with reality — or I’m in serious trouble. 
