Census Housing Data

http://www.metrostudyreport.com/?p=487#more-487

What’s UP with New Home Sales?
Posted in Economy, National Housing Market | Posted on 03-26-2010 | Written by Mike Castleman Sr.
NEW HOME SALES – Is the Number Up or Down?

EXCERPT

http://www.census.gov/const/www/newressalesdoc.html

What we receive from Census.gov is statistical “output”. It is not data. The data is the stuff they gather when they do their sampling. The value of this “output” is extremely limited. For example, in the most recent news release on New Home Sales, The Census Bureau states:
”Sales of new single-family houses in February 2010 were at a seasonally adjusted annual rate of 308,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.2 percent (±15.3%)* below the revised January rate of 315,000 and is 13.0 percent (±12.2%) below the February 2009 estimate of 354,000.” (My emphasis)
Note the asterisk* above. The following statement appears in every footnote of the Census.gov news releases on housing.
“*Whenever a statement such as “2.5 percent (±3.2%) above” appears in the text, this indicates the range (-0.7 to +5.7 percent) in which the actual percent change is likely to have occurred. All ranges given for percent changes are 90-percent confidence intervals and account only for sampling variability. If a range does not contain zero, the change is statistically significant. If it does contain zero, the change is not statistically significant; that is, it is uncertain whether there was an increase or decrease.” (My emphasis)
In simple terms, the footnote says that when the margin of error % (+15%) is greater than the % change of the estimate (-2.2%), they do not know if there has been a change or not, even though they state that a change has occurred. For the last two years, almost every release from Census.gov has invoked the footnote that they do not know whether there has been an increase of decrease in the month to month housing estimates. So when these releases come out, COVER YOUR EYES and EARS.
When we are making important decisions about the housing market, we need very accurate, reliable, consistent data, and we need Information. Information is the informed opinion that is derived from the data. Statistics are not information, because statistics constitute a guess as to what the data means, if the data are indeed reliable. At the end of the day, because the data are not known to be reliable, the Census Bureau statistics can devolve into meaningless output that does not contribute to sound risk management.