U.S. Housing Numbers - More Nonsense

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Includes: IYR, XHB
by: Jeff Nielson

Regular readers will be familiar with my crusade to expose the fictional, U.S. housing numbers – which are conjured “out of thin air” every month. In particular, my wrath has been focused on the ridiculous numbers supplied to the market with respect to U.S. new homes.

Every month U.S. home-builders start construction on far more homes than they sell. Despite this huge gap, for over 18 months, the U.S. propaganda-machine has been pretending that the unsold inventories of new homes have been steadily declining. This is why you will never, ever see a U.S. media outlet provide both new home “starts” and new home “sales” in the same article.

Thus, for the first time ever, readers have a chance to see those numbers for themselves:

Month Sales Starts Differential

January 322,000 477,000 +155,000

February 337,000 572,000 +235,000

March 351,000 525,000 +174,000

April 344,000 454,000 +110,000

May 346,000 532,000 +186,000

June 395,000 587,000 +192,000

July 426,000 589,000 +163,000

August 417,000 587,000 +170,000

September 405,000 592,000 +187,000

October 400,000 529,000 +129,000

November 355,000 574,000 +219,000

That's right, the same media outlets which have all reported these numbers for starts and sales all claim that the inventories of unsold, new homes have been falling virtually every month since March 2008.

Here is what propaganda-mouthpiece, Bloomberg had to say Tuesday about the total number of new, unsold homes in the U.S.: “the number of homes for sale fell to a seasonally-adjusted 235,000, the fewest since April 1971.”

Let me repeat this to make sure people are paying attention. After U.S. home-builders started construction on roughly 50% more housing units than they sold (just in this year), Bloomberg is claiming that the number of unsold, new homes fell to its lowest level in 38 years.

These aren't “honest mistakes”. They aren't even faulty “estimates” - since it's impossible to “estimate” that the number of homes for sale is falling while home-builders are starting construction on 50% more homes than they are selling. This is the pure fabrication of numbers.

For those looking to 'translate' U.S. economic propaganda, my suggestion is to look for the phrase “seasonally adjusted”. For example, Bloomberg reported a “seasonally-adjusted” 235,000 homes for sale. Obviously, this is not a statistic where it is rationally possible to make a “seasonal adjustment”. Either a home is for sale, or it is not for sale. It is 100% irrelevant to this number whether the date is June 1 or December 1. Therefore, when U.S. propagandists use the phrase “seasonally adjusted” what it actually means is that the propaganda-machine didn't like the real number – so they simply invented a more market-friendly “statistic”.

Clearly, either the number of “new home starts” every month is a complete fabrication, or the inventory numbers are a complete fabrication – or both.

Given that U.S. home-builders (apparently) started construction on hundreds of thousands more units than they sold this year, plus the remaining unsold inventories from last year, a true inventory number that is consistent with the “starts” and “sales” numbers would easily be double the "official" total, and more likely triple that amount.

What we are left with as the two most likely probabilities are either U.S. housing inventories are much higher than reported, or the “new home starts” numbers are complete fabrications, since they exceed the number of units sold by hundreds of thousands of units each year - the only way in which inventories could really decline. For market-watchers, the obvious question would be: what are U.S. home-builders really worth once you strip-away all those fictional “housing starts” or add un-reported inventories?

Clearly, Bloomberg's statement that the unsold inventory of new homes is at its lowest level in 38 years is a fabrication which has no connection to the real world. For those who are interested, the differentials between “starts” and “sales” were much larger in 2008 – exceeding that 50% differential of 2009 by a wide margin. In other words, the lies are actually smaller this year.

The bottom-line is that every time a U.S. propaganda outlet reports that “inventories are declining” that such reports should be completely ignored – as being so utterly inconsistent with reality that there is no possibility of truth. The day to begin to take U.S. housing “statistics” seriously is the day that U.S. media outlets begin to report “starts”, “sales”, and “inventory” numbers all together.

As long as the U.S. propaganda-machine continues its game of hiding the truth, by keeping these numbers separate in order to report absurdly fictional numbers, no rational adult can justify taking these numbers seriously.

Disclosure: none

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