NAR Uses Statistical Trick To Show Annual Increase Declining Sale Closings

The NAR reported the misnamed “Existing Home Sales” on Wednesday. Yes, they are existing homes. No, the data doesn’t report sales. The report shows prior sales contracts that closed during the month. The data should rightly be called, “Closings of Previously Sold Homes.” All parties to the sale, the buyer, the seller, and the agent recognize the contract as the sale. That’s when the SOLD sign goes up. The closing is a formality 95% of the time.

The reported numbers weren’t great but they also weren’t accurate. The actual numbers were worse than the headlines indicated. The NAR used seasonal adjustment to turn a year to year decline into a gain. The Census Bureau did the same thing with this week’s release of New Home Sales data. In both cases, not only was the data worse than the consensus guess of economists, it was worse than the headlines and media reports said it was. The headline numbers obscured the degree of weakness.

As the Wall Street Journal told us:

Home sales declined in April, a tepid start to a spring selling season marked by a dearth of homes available for purchase.

Sales of previously owned U.S. homes last month fell 2.3% from March’s revised level to a seasonally adjusted annual rate of 5.57 million, the National Association of Realtors said Wednesday.

This spring selling season promises to be the most competitive in years, with a flood of new buyers entering the…