One Hell of a Seasonal Adjustment: NAR's Existing Home Sales Math


The NAR says existing home sales are down 2.2% from a year ago. The breakouts by price range do not seem to add up.

The NAR reports Existing-Home Sales Falter 1.7% in June

Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 1.7% from May to a seasonally adjusted annual rate of 5.27 million in June. Sales as a whole are down 2.2% from a year ago (5.39 million in June 2018).

Percent Sales by Price Range

Percent Changes From Year Ago by Price Range

The NAR's Supplemental Data provides a look at regional differences.

Supplemental Data

Weighted Contributions

Down 10% on a 35.7% distribution overwhelms up 1.0% on a 39.4% contribution.

I calculate net weighted sales as -4.72% year-over-year based on the the NAR's Sales Distribution Percentages.

Seasonal Adjustments

I bounced this off Calculated Risk who tells me there was a huge seasonal adjustment this year. To my way of thinking, seasonal adjustments should not affect year-over-year comparisons.

But it did, as presented.

It's one hell of a seasonal adjustment.

Explaining the Sales Decline

Please also see Existing Homes Prices Up 88th Month: NAR Can't Figure Out Why Sales Are Down

Mike "Mish" Shedlock

Comments (6)
No. 1-5

"To my way of thinking, seasonal adjustments should not affect year-over-year comparisons."


Calendar effect. June 2018 had 5 Fridays. June 2019 only had 4. Existing home sales counted when closed. Many closings occur on a Friday for several reasons. 1) everyone involved due a check at closing likes a Friday close ---> head to bank ---> knock off early for weekend and celebrate 2) Buyer wants a Friday close in order to move in immediately. The mortgage is pro rated ... clock starts ticking at closing. Closing on say a Tuesday and then not able to move till Saturday could easily cost buyer $hundreds.


Guess I bought into a declining market. No matter. I need a place to live and I'm locked in under 4% on a brick house in Norman, OK.


After looking into the police and fire pensions in my suburban locale, a for sale sign might the best home improvement I can make. Thinly populated areas do not have that problem. Might be a good time to make that move before real erosion takes place.


@Mish , Can you provide more color on the 'seasonal' adjustment. On the surface a seasonal adjustment should not impact yoy comparisons. It clearly sounds counter-intuitive. However while Yun never seems to act the economist, and always the housing booster offering sanguine analysis and forecasts the actual NAR numbers are not typically disputed.


Am I the only one who feels that we are being lied to 24/7/365 by everyone involved in the FIRE sector?