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Yes, New Home Sales Rise, But Watch Out For The Spin

Every time a new report is issued in the housing market these days, I get at least a dozen interpretations in my In box within a matter of minutes.

Last week it was existing home sales, with many suggesting that the 5.5 percent monthly increase was a false indicator because the Realtors, who put out the report, seasonally adjust the numbers. The actual sale numbers fell month to month.

Today it’s the new home sales report from the U.S. Dept. of Commerce, which is famous for its exceedingly wide margins of error, margins that can be up to 6,7, even 8 times the actual number reported.

So new home sales increased 2.7 percent in September from the month before, with a margin of error of +/-12 percent. The actual number, not accounting for the seasonal adjustment, again, is a drop.

The good sign at least is that inventories appear to be falling, on a month’s supply basis. But as we all know, all the sales are being driven by lower prices, and despite the sales bumps, the price drops do not appear to be bottoming.

Oh, and one more thing the spinners note: down payment assistance is but a memory now, and the surge in September could be buyers getting in under the wire.

Video: A look at the real estate numbers, with CNBC's Rick Santelli, Diana Olick, Steve Liesman and Ross Westgate; Joseph Brusuelas, Merk Investments.

Questions? Comments? RealtyCheck@cnbc.com

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  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.

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