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New home sales numbers are notoriously misleading in the current environment. The reason is that a sale is recorded when a contract is signed. Therefore, those numbers don't take cancellations into consideration. The major homebuilders have been running 25%-40% cancellation rates. The same thing happens with the pricing. I believe new home prices rose 0.6% last month. That's great except anyone that's looked at the new home market knows that builders are offering unbelievable incentives, sometimes as much as $100,000. The recorded sales price does not reflect these discounts and therefore is inflated.
As for Homebuilder Incentives, I agree. You can currently get upgrades and a cash discount at the drop of a hat. However, the full asking price is reflected in the sales contract.New home sales numbers are notoriously misleading in the current environment. The reason is that a sale is recorded when a contract is signed. Therefore, those numbers don't take cancellations into consideration. The major homebuilders have been running 25%-40% cancellation rates. The same thing happens with the pricing. I believe new home prices rose 0.6% last month. That's great except anyone that's looked at the new home market knows that builders are offering unbelievable incentives, sometimes as much as $100,000. The recorded sales price does not reflect these discounts and therefore is inflated.
As for new home sales, It's six of one, half a dozen of the other, in my opinion. If the sale is reported at the time the contract is signed, as you state, then it just means that the indicator is going to lag somewhat longer. 25-40% of new home sales in May that were cancelled would be reflected in June. Cancelled June sales would show up in July, etc.
And it looks like the run on Countrywide (because of an infusion of cash from B of A) is not spreading to other large companies.
Also, transportation tends to be a leading indicator, and will start to recover before the rest of the economy.
As far as this pertains to trucking, I am cautiously optimistic.
Feel free to disagree ...