Several economists approached NAR late last year with questions about its modeling. NAR economists promised to study the issue during a December conference call that included economists from the Mortgage Bankers Association, Fannie Mae, Freddie Mac, the Federal Reserve, the Federal Housing Finance Agency and CoreLogic.
... Even assuming a high share of all-cash sales, purchase-loan application data suggests that home sales have been overstated by 10% to 15%, said Jay Brinkmann, the MBA's chief economist.
"If they are off by this much, this consistently, it would be sending the wrong signal to the market," said Mr. Brinkmann.
The real key is the level of inventory and months-of-supply. Prices were boosted in 2009 and early 2010 by a combination of policies, including the housing tax credits, foreclosure moratoriums (reducing supply), and low mortgage rates. Prices are now falling again, and if the months-of-supply is substantially higher than originally thought (the NAR reported 8.1 months in December), then prices will probably fall further than many analysts expect.
Join us on our
Share this page with your friends
on your favorite social network: