The Phaserl


Existing Home Sales: The Real Numbers Are Much Worse Than Reported

by Dave Kranzler, Investment Research Dynamics:

To start, please reserve any judgement on the Census Bureau’s new home sales report released yesterday (Thursday, 9/24), which showed an absurd bounce in new home sales during August. The numbers compiled and statistically manipulated to by the Census Bureau diverged significantly from any private-sector reported data, like mortgage applications and the actual reported results of homebuilders. I’ll get this matter in the near future.

The existing home sales report released earlier in the week showed that existing home sales expressed in terms of the National Association’s statistically manipulated “seasonally adjusted annualize rate” dropped 5% from August. (As an aside, it is thoroughly retarded to take a monthly report and project an annualized rate for that month. It would be much “cleaner” and accurate to take the already suspect seaonally adjusted monthly number and leave it at that to be used for month to month and year over year comparisons).

However, analyzing the de-seasonally adjusted and unannualized numbers, which are provided by the NAR but about which no one discusses, shows that the decline in August existing home sales was significantly worse than than the numbers reported by the headline and made love to by Lawrence Yun, the NAR chief “economist.”

I wrote a piece for Seeking Alpha in which is tore apart the NAR report and laid out an analysis which shows that the month to month drop was much more severe. Moreover, the year over year comp is an easy comp because higher rates in 2014 caused a drop from 2013. However rates trended toward all-time lows again in the spring of 2015, which gave home sales another temporary boost – possibly its last boost.

You can read my article here: August Existing Home Sales Drop 3 Times Faster Than Expected.

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