Reply #87: But no one with a brain in their head ever uses month to month housing numbers.. [View All]

[girl gone mad]

as an indicator of where the market is headed, unless the numbers are wildly unexpected.

The housing market is highly seasonal. Anyone with kids tries to avoid disrupting their school year by moving before to the start of the new school year in September. This factor, along with holiday activity, explains the annual rhythm of existing home sales.

January is the always the worst month of the year for sales. From that low point, sales gradually climb through June and peak in July and August, and then decline again until December. This happens every year. It's a very consistent, established pattern.

Anyone who actually wants to understand the state of the housing market has two options to avoid this cyclical seasonality: 1. Use year over year data. This removes the seasonal patterns by comparing January to January, June to June, etc. Or 2. Compare non seasonably adjusted monthly data over the course of multiple years.

Since the market peaked in 2005, we have been in a strong downtrend. Prices have fallen about 27% nationally, and units sales are off about 30% from the highs of over 7 million annual sales in 2005.

The data referenced above is nothing more than NAR cheerleading.