Every month a variety of press commentary discusses NAR’s Existing Home Sales market data. Can commentary about the housing outlook be summarized in a visually compelling graph? The answer is “Yes”.
- Home sales on a 6/12-month rolling basis--i.e., total sales on a previous six and twelve month trending basis—summarizes the existing home sales markets. Economic trends tend to continue—so a 12 –month roll gives a fairly good idea of where the market will head for the next few months.
- The six month trend shows that sales fluctuate and are cyclical. Normal fluctuations occur: it’s important to look at the underlying trends. The twelve month trend shows where the market has been—and trends tend to keep moving unless a new development causes them to change.
- The graph shows that right now housing sales have temporarily plateaued; in conjunction with low inventory and rising price information the problem is on the supply side: the market is not in trouble—just constrained. Will the market change? Yes, when more inventory becomes available. The ongoing economic expansion may help in getting some more inventories.
- Adding a second graph can show home prices—again on a rolling six and twelve month basis. Again, there appears to be underlying market strength. Rising prices mean fewer people are “under water” on their mortgages—an opportunity to move if desired and the potential creation of additional inventory.
What Does this Mean for REALTORS®?
A quick market summary “cuts to the chase.” After everything the housing markets have been through and with all of the ongoing commentary in the news, a simple graph summarizes the markets at the national level, and a second graph summarizes prices.