The Housing Market May Be Stronger Than it Appears
Forbes reports that recent home sales numbers showing month-to-month losses should be replaced by longer-term, more reliable statistics.
Beneath the flaws is the mistaken notion that the latest monthly reading (a preliminary number), when compared to the previous month (a now-revised number), defines homebuilding’s health and growth – or lack of it.
However, homebuilding runs in longer-term cycles. The actual state of homebuilding in 2019 is continued growth with indications of potential increase.
For a homebuilding measure to be useful, we need to work around seasonality, monthly variability and survey inaccuracy. There are two approaches that can provide a good picture of homebuilding health and growth.