The NAR released new data that shows an unexpected increase in existing home sales for August…Up 8.8% compared to August of 2007.
Its safe to say that the existing homes sales increased due to a couple important elements:
1) Short sales are closing (faster)
2) Banks are dumping their REOs.
Have you seen this CNBC chart comparing Existing Home Sales and Pending Home sales from a June article titled: NAR’s Pending Home Sales: Something’s Amiss
Source: CNBC Reality Check
But here is a longer term graph from the WSJ.
Source: WSJ Real Time Economics
This shows that existing home sales do track Pending Home Sales pretty well over a longer period.
Note: The WSJ advanced pending home sales one month.
And here is a third graph from Northern Trust:
Source: Northern Trust
Note that Northern Trust uses a 2 month lag.
This shows that the choice of scale and time period can impact these types of comparisons. I think the first graph is misleading, and that Existing Homes Sales do track Pending Home Sales pretty well.
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