The last Census Bureau Survey of New Home Sales showed a lower increase than most expected (417,000, or 1.5% above the previous month). Part of the reason for the lower growth rate was an upward revision to February (to 411,000), but both months are far below the January pace (445,000). These are all adjusted numbers, so seasonality should not be a factor.

But it is precisely seasonality that is starting to confuse the overall picture in housing. For example, the raw data for March 2013 was a total of 40,000 new homes sold in the United States. There were 34,000 homes sold in March 2012, for an impressive gain of 17.6%. But how does March 2013 compare to February or January? In other words, is that pace in March still on trend? That’s where the seasonal adjustments come in.

There were 33,000 houses sold in February 2013, 10% more than February 2012. January 2013 showed 34.8% more houses sold over January 2012. From those unadjusted figures, it does appear as if the slowing trend is real. What we don’t know, and can’t know for sure is how much.

The Census Bureau gives us an idea, however, in its citation of the 90% confidence window for its adjusted estimates. The adjusted growth rate in March 2013 over February 2013 is 1.5%, but in reality the Census Bureau is only 90% certain that the actual growth rate is somewhere between -15.4% and +18.4%. The confidence window is an unusually large 33.8% spread. This wide standard deviation is due to the sudden surge in activity in 2012 far above the more recent results from 2010 and 2011.

What that means is there is a tremendous amount of volatility in the data and we should expect a less than perfect (or even usual) picture of the housing trend.

The median sales price in March was estimated at $247,000, down from $264,900 in February, but up from $239,800 in March 2012. However, average sales price was lower in March than the previous month (-9.7%) and previous year (-1.3%).

From March through August 2012 the Census Bureau counted about 37% of all new home sales below $200,000 in price. February 2013 saw only 27% in that range, while March ticked up to 32%. It is not at all clear why there would be a sudden decrease in proportional home sales in this lower price group. Is this simply a reflection of price direction and “strength” skewing the overall proportion of sales activity or is it a reflection of renewed buying interest in higher priced homes (bubble)?

The former might explain the drop in homebuilder confidence that shook up expectations earlier in the month. The NAHB’s (the home builder trade group designed to cheerlead housing) Housing Market Index current sales conditions subcomponent fell from 47 to 45 in April, while the buyer traffic subindex fell from 34 to 30. Houses, even if there is a bubble-type element to the trend, will still be sensitive to rising prices. That is decidedly so in the owner-to-rental investment model.

Anecdotally, the home builder survey highlights homebuilder complaints about the rising costs of materials, so any retreat on price would squeeze activity hard. Again, however, the data is too “noisy” at the moment to draw any hard conclusions.