If new home sales are any signal of a recovering economy, we’re blazing. Today, the Commerce Department reported that sales of single-family new homes charted their largest increase in more than three decades. More specifically, 33-1/2 years.
Say what? That’s right. 33-1/2 years. What happened, did everyone have a sale in the month of October?

According to the numbers, sales increased 25.4 percent to an adjusted rate of 444,000 new homes, while falling the previous month by 6.6 percent for September. And pundits everywhere are trying to explain the accounting. But the numbers are what they are, and they’re strong.

You may recall in September, rates hit an intra-year high when 30 year mortgage rates averaged 4.50 percent so perhaps that stalled the new home market but that doesn’t really explain why when rates hit 4.20 percent in October that suddenly close to a half million brand new homes were sold.

Maybe the September stall was due to the pending government shutdown which many economists have pointed to when an economic number simply can’t be explained. It makes sense to blame lower new home sales on a government shutdown but in reality only a small percentage of the government really closed its doors and for all anyone really knows, most of the shutdown involved national parks or monuments in D.C.  And if that were the case, why did existing single family homes not report a similar jump in pace?

The Commerce Department wasn’t immune to the shutdown and it’s likely that the October 444,000 new home count is skewed due and if so, then the November new home sales will be something closer to 250,000 to offset the heavy October count.

We’ve said here before that it may take a few months before economic reports settle back into rhythm to account for the 16 days certain government offices were closed, but from this point forward, December reporting should be a bit closer to normal. We’ll find out this Friday when non-farm payroll numbers are released.