Washington, D.C., United States (AHN) – Fewer homes were sold during the past five years than previously estimated so the National Association of Realtors announce it plans to release revised figures with a downward estimate on Dec. 21.
NAR made the announcement on Tuesday. The trade group organization said it had made mistakes in previous reports on existing home sales going back to 2007.
The monthly report on sales of existing homes is one of the most closely watched barometers of the health of the nation’s housing market. The housing market, in turn, is a closely watched gauge of the health of the economy as a whole.
That meant there might be many ramifications from a downward revision of the number of existing homes sold over the past five years. The numbers were already bad.
Analytics firm CoreLogic earlier said its data showed that NAR had overstated existing home sales by 15percent for 2010.
The NAR hasn’t stated exactly how large the downward revision to existing homes sales figures will be. However, NAR Chief Economist Lawrence Yun called the drop “meaningful” and said that the housing market’s downturn was “deeper” than originally thought.
Nevertheless, NAR said the undercount was inadvertent and not deliberate and happened because the economy had changed.
The database the NAR has always used to track existing home sales is the Multiple Listing Service (MLS).
However, using the MLS for the past five years led to an over count of existing home sales. The MLS only counts houses sold by realtors and not those listed by owners. But the economic downturn led more people to use realtors instead of selling their homes themselves. Yun said that resulted in an artificial inflation in the number of realtor-listed existing home sales.
In addition, there was an increase in duplication or counting the same sale more than once in the figures.
The NAR said re-benchmarking its figures is a normal process that occurs periodically. The trade group said it is issuing revised figures after consulting with CoreLogic, the Department of Housing and Urban Development, Fannie Mae, Freddie Mac, the Federal Reserve, the Mortgage Bankers Association, and the National Association of Home Builders.
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