Economists' Outlook

Housing stats and analysis from NAR's research experts.

Raw Count of Home Sales (September 2015)

  • Existing-home sales increased 4.7 percent in September from one month prior while new home sales decreased 11.5 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 September while new home sales totaled 36,000. These raw counts represent a 7 percent loss for existing-home sales from one month prior while new home sales dropped 16 percent. What was the trend in the recent years? Sales from August to September decreased by 16 percent on average in the prior three years for existing-homes and remained the same for new homes. So this year, existing-homes outperformed compared to their recent norm while new home sales underperformed.
  • 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 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 better activity in October for existing-home sales. For example, in the past 3 years, October sales increased by 2 to 8 percent from September. In contrast, existing-home sales slipped in November by 4 to 21 percent. For the new home sales market, the raw sales activity in October tends to be better than that occurring in September, and activity slows back down in November. For example, in the past 3 years, October sales rose by 3 to 16 percent from September while November sales dropped by 3 to 18 percent. All in all, REALTORS® get ready to give out a candy to your “trick or treater” buyers.

existing home sales
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