Including home buying and selling, commercial, international, NAR member information, and technology. Use the data to improve your business through knowledge of the latest trends and statistics.
Stay current on industry issues with daily news from NAR. Network with other professionals, attend a seminar, and keep up with industry trends through events hosted by NAR.
Including home buying and selling, commercial, international, NAR member information, and technology. Use the data to improve your business through knowledge of the latest trends and statistics.
Stay current on industry issues with daily news from NAR. Network with other professionals, attend a seminar, and keep up with industry trends through events hosted by NAR.
Existing-home sales increased 1.7 percent in March from one month prior while new home sales rose 16.6 percent. These headline figures are seasonally adjusted figures and are reported in the news. However, for everyday practitioners, simple raw counts of home sales are often more meaningful than the seasonally adjusted figures. The raw count determines income and helps better assess how busy the market has been.
Specifically, 471,000 existing-homes were sold in April while new home sales totaled 61,000. These raw counts represent a 12 percent gain for existing-home sales from one month prior while new home sales increased 22 percent. What was the trend in recent years? Sales from March to April increased by 16 percent on average in the prior three years for existing-homes and rose 3 percent for new homes. So this year, existing-homes underperformed compared to their recent norm while new home sales outperformed.
Why are seasonally adjusted figures reported in the news? To assess the overall trending direction of the economy, nearly all economic data – from GDP and employment to consumer price inflation and industrial production - are seasonally adjusted to account for regular events we can anticipate that have an effect on data around the same time each year. For example, if December raw retail sales rise by, say, 20 percent, we should not celebrate this higher figure if it is generally the case that December retail sales rise by 35 percent because of holiday gift buying activity. Similarly, we should not say that the labor market is crashing when the raw count on employment declines in September just as the summer vacation season ends. That is why economic figures are seasonally adjusted with special algorithms to account for the normal seasonal swings in figures and whether there were more business days (Monday to Friday) during the month. When seasonally adjusted data say an increase, then this is implying a truly strengthening condition.
What to expect about home sales in the upcoming months in terms of raw counts? Independent of headline seasonally adjusted figures, expect busier activity in May and even better activity in June for existing-home sales. For example, in the past 3 years, May sales increased by 10 to 13 percent from April and with more gains in June when sales typically rose by 7 to 16 percent from May. For the new home sales market, the raw sales activity seems to be volatile in May and June. For example, in the past 3 years, May sales rose by 10 percent in 2014 while they decreased by 2 to 7 percent in 2013 and 2015. Similarly, sales in June increased by 8 percent in 2013 while they decreased by 6 to 12 percent in 2014 and 2015.
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