The unexpected happened again

The unexpected happened again. New-home sales fell to a seven-year low and February's inventories of unsold houses at sitting at a 16-year high. Both were unexpected. BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? Sales of new homes unexpectedly dropped in February to the lowest level seen in nearly seven years, while inventories of unsold homes rose to a 16-year high, suggesting that the nation's housing market was softening heading into the vital spring buying season. Sales of newly constructed single-family houses unexpectedly slowed again in February, falling 3.9% to a seasonally adjusted annual rate of 848,000, the lowest level since June 2000, the Commerce Department reported Monday. Sales were down 18.3% compared with February 2006. I am wondering if bad news is ever expected. I am also wondering exactly what economists MarketWatch is surveying. Perhaps they need a new set of economists because this was simply not all that surprising. Sales of new one-family houses in February 2007 were at a seasonally adjusted annual rate of 848,000, according to estimates released jointly today by the U. S. Census Bureau and the Department of Housing and Urban Development. This is 3.9 percent below the revised January rate of 882,000 and is 18.3 percent below the February 2006 estimate of 1,038,000. I am struggling to understand why month in and month out no one expects a decline in home sales to happen when I expect things to get much worse. We are not even in a recession yet (or so is claimed) but inventories of unsold housing are at 16 years highs dating back to 1991. This is simple economics: To sell that inventory prices have to drop or demand has to pick up. Forget demographics, forget wants and desires, forget the fact that people have to live somewhere. Forget all of the nonsense from the NAR. Especially forget the NAR's perpetual chant ' '. According to the NAR there is never a better time to buy than now. Furthermore there will never ever be a better time to buy than now. Supply is high but the bulk of ARMs resets has not occurred yet. Layoffs in the upcoming recession have not occurred yet. Substantial foreclosed properties are not even on the market yet. The content on this site is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.