You may recall that on Saturday I warned of an UNEXPECTED collapse in home sales this week. Now consider the deceptive headline from NAR: July Existing-Home Sales Fall as Expected but Prices Rise.
Here’s the consensus forecast that preceded it: “the “consensus” forecast for existing home sales in July calls for a SAAR of 4.65-4.66 million which would be down just 9.3-9.5% from last July’s seasonally adjusted pace.”
And here’s the actual number in the report: Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, (it was originally reported as 5.37 million) and are 25.5 percent below the 5.14 million-unit level in July 2009. Furthermore, it would be less misleading to say that they fell 28.7% from the previously reported figures rather than 27.2% from the newly revised ones.
The shameless spin doctors at NAR are attempting to claim that after a consensus forecast was overly optimistic by 825,000(!) existing home sales, a drop that is 216% larger than the one that was predicted, sales fell “as expected”. I would encourage you to keep these shenanigans in mind as you read their economic forecasts going forward. To put the magnitude of this collapse in perspective, here’s a chart from The Atlantic:
