Sales Headlines Are Misleading

Decision makers don't have time to study all of the data, yet they make huge decisions every day based on what they believe to be the market outlook. Smart decision makers rely on someone who is unbiased to study all of the data and provide a fair outlook.

National sales volumes have not bottomed, as reported earlier this month. New home sales are falling in all regions of the country. Existing home sales have risen sharply in the West and, while they continue to fall elsewhere, it is at a slower rate of decline in more recent months.

Recent headlines based on Seasonally Adjusted (SA) data are misleading. Reporters have been trained to cover the SA numbers each month. While the SA numbers have merit, they bounce around a lot because of sample size, weather, or other issues such as whether Easter is in March or April. These issues are often addressed in the body of the article, or in the later stages of the TV report, but most people unfortunately do not pay attention to the details.

To get a more reliable (but less newsworthy) picture of the housing market, we track a rolling 12-month total of sales. When the rolling 12-month total line flattens or begins to flatten, year-over-year sales have equaled and the appearance of a bottom is beginning to form. This data has some of the same seasonal issues, but is less prone to the wild and misleading headlines that often accompany the Seasonally Adjusted data. (more)