While the Internet offers a plethora of primary data sources that can be tapped to gain a better understanding of economics and the housing market, along with them come even more sites offering interpretations of those primary data sources. While some of these sites may seem to serve an educational purpose, and in fact be helpful in navigating the complex world of economics, be wary of any overt or hidden agenda. It is a simple fact that in our capitalist society most internet sites exist to make money for some individual or industry; be cognizant of this fact any time you are reading interpretations of primary data.
For example, in the NAR news release on September 2016 existing home sales, Lawrence Yun, the NAR chief economist is quoted as saying, “Inventory has been extremely tight all year and is unlikely to improve now that the seasonal decline in listings is about to kick in. Unfortunately, there won’t be much relief from new home construction, which continues to be grossly inadequate in relation to demand.”
That inventory is too low to support demand is not data—it’s interpretation of data. I, for one, have provided a different interpretation of this data. I believe and have provided substantial, evidence-based analysis that housing demand is not strong and low inventory is not holding it back. We had more annual monthly supply inventory from 2012-2016 than any period from 1999-2005 when interest rates and sales were higher. Interest rates have been under 5 percent since early 2011 and still the demand for both new and existing homes has been light. My recommendation: absorb the data, read the various interpretations, then think it through for yourself.