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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Sept. data: Durable goods up, new home sales down

In seemingly conflicting data out this morning, orders for durable goods -- big-ticket items, like refrigerators -- rose 1 percent in September while new home sales fell 3.6 percent.

But a dig into the numbers should eradicate the mystery. First, the housing number.

Forecasters expected new home sales in September to hit an annual rate of 440,000. Instead, the number came in at 402,000. Forecasters were surprised by the actual number, but I'm having a hard time figuring out why. The $8,000 first-time homebuyer credit expires at the end of next month, unless Congress acts to extend it. That's simple math. Take away the credit, take away sales.

Sales of existing homes have been up, but only at the low end. No one's buying houses that cost more than $250,000. If you take away the credit, people will stop buying houses less than $250,000, as well.

On durable goods, the September number is up, but it's not part of a consistent trend.

Orders for airplanes and autos (cash-for-clunkers hangover) actually fell last month, but a big surge in orders for machinery pushed the total number up, indicating a rebound in manufacturing.

However, September's 1 percent rise in orders follows a 2.8 percent decline in August and a 4.8 rise in July. So it's hard to draw any kind of straight line out of this data, or draw any solid conclusions about recovery.

-- Frank Ahrens
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By Frank Ahrens  |  October 28, 2009; 11:25 AM ET
Categories:  The Ticker  | Tags: durable goods, home sales  
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Home sellers could use the soon to expire tax credit idea by lowering their sales price by $8,000 dollars and then use the reduction in marketing. Real estate firms could also develop a "sale" by highlighting their properties that were reduced by $8,000.

Posted by: org2 | October 28, 2009 12:03 PM | Report abuse

Its a pretty strong assumption that new home sales are down because the tax-credit will expire soon...what kind of sense does that make? seems like the writer has an agenda to extend the credit.

I think its more likely new home sales are down because the market is loaded with bargains. Why pay to build an expensive new home when there are plenty of 3-year-old foreclosures available. make sense?

Posted by: edvanrensyahoocom | October 28, 2009 12:19 PM | Report abuse

One of the reasons that durable goods like refrigerators have gone up in sales has to do with the incentives being offered right now. For example, many states are willing to pay you to pick up your old refrigerator and will give you a rebate on your new refrigerator if it is energy star rated. I run a Refrigerator Review website called and we've seen an increase in the demand of users just to get more information on the topic of refrigerators within the last 6-8 months.

Posted by: Heidi3 | October 29, 2009 5:49 PM | Report abuse

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