Correct me if I am wrong but wouldn't increasing US bond yields lead to a stronger USD ?

Bill,

What I didn't realize in thinking yesterday that New Home Sales would have a drop similar to Resales reported the previous day was that these New Home sales are from excess inventory and do not reflect new home construction activity. I agree that there is an incentivized inventory adjustment going on here and in some regions there is a fire sale. What should be watched is price and not volume or activity. I suspect that sharply falling home prices are doing great damage to the over-all economy and are a better reflection of the state of the consumer's wallet.

A dance! So that explaines it. I love that illustration, Bill. You've used it before.

Alas, some of us have more experience than we would like with the Twist, the Slow Twist, and the Slow Twistin in the Wind.

But you're doing you're part to impart sense.

TerryC, new home sales also do not subtract cancellations. With cancellation rates still very high in most markets, this is also adding false hope to these numbers.

And you point out a good fact to remember -- new home sales do not track new construction. That's particularly true today, as builders are concentrating on moving homes that are sitting in inventory. Ironically, this is due to the very same cancellations that caused earlier reports to appear larger than they really were.

Bill
I have to question all the confetti throwing the Fed is doing with the 4.8% supposed rise in new housing starts for the month of December.
Here in the Midwest where the housing was still strong all year compared to the two coastal regions of US. There has been a drastic decline in the # of new housing starts for the month of December and continuing into the month of January.
From my first hand knowledge.....One of the largest home builders in our area sends out an erection schedule for all the subs to use for their own work schedules. For the last five, maybe six consecutive years their monthly schedule had new erection starts per month of between 20(winter) and 26(spring summer fall) houses. Yes those numbers are from past memory, but after 34 years, there are somethings you keep in the back of your mind when it comes to residential housing. Getting to my point....The month of December had an erection schedule of 3 new homes. That's right, 3 new home starts for this particular builder for the month of December, and that's exactly what they set. The schedule for January had a grand total of 4 new houses to set, and they just started setting the 4th house today, with no others to set for the rest of this month. The February schedule came out last week and again, their schedule has 4 new houses to build again.
I say the Fed is releasing data that can not be proved, or percentage data that is just full of crapola. This isn't a seasonal housing slow down, this is just a housing slow down. Normally there would be 20 new housing starts all winter long, not 3 and 4.
You are free to draw your own conclusion about the Fed's supposed 4.8% increase in housing starts for December, but let me have my opinion even if it differs from all the others opinions out there.
I'm starting to think our government tries to mislead the people into thinking everything is just grandiose so they can keep them spending money they do have, and charging money they don't have. That band aid over a gapping gash methodology is going to some day need a tourniquet before it's to late.
Kind of long winded here, but I just get furious with numbers that are so far from the honest truth. Anyway, this is the way I see it from me being out and around new housing day after day after day.
Good luck with your book!

Dear Bill and Everyone,

This housing thing in the New York area is a joke. I live in Westport, CT. Things are ALWAYS great here. And people here do earn, bigtime, on average, still. But as far as housing is concerned, the market is a a standstill. There are 314 homes for sale in this town now, according to realtor.com, and many that went unsold in the fall were withdrawn from the market 'till spring. Prices haven't really dropped but volume has disappeared, there is no bid. Lookout beeeeeeeeLLLLLLLLLoooooooooooooooooooowwwwwww!!!!!!!!!!!
(a disclaimer, I don't own, I rent, and I'd like to pick up one on the cheap)
When Dr. Greenspan lowered the real rate of interest to a negative figure versus inflation, you were like, stupid not to borrow the money and buy a house. Dr. G absorbed maybe 10 years of demand in two or three years of wildly printing money to service the treasonous amount of debt we owe and to pump it into housing, which he did because he feared recession in the wake of the blowup of the phony Internet stocks in 2000, and the attacks of the 11th, which I witnessed from my office window. At the same time, we have a couple'a gazillion baby boomers and older, looking to cash in their housing chips up here where it's expensive and to go south and south-west where it's cheap. No duh the consumer economy will suffer, maybe not recession, but the price must be paid for the excesses of Bernanke's predecessor, and 'Ol Ben seems willing to let the housing, and the stock market, pay it.