Existing home sales crush the housing bears

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The National Association of Realtors‘ existing home sales report for September came in at an excellent beat of estimates at 6.29 million. Now that we are just 10 days away from Halloween in 2021, we can all chuckle a bit at how wrong the housing bears of 2020-2021 have been. Especially all those crazy cats on YouTube forecasting the 2021 collapse of housing due to forbearance.

Don’t worry, though, I have heard that some have moved their crash to 2022 or an undisclosed location. Remember to believe in people who believe in economic models and dare to do forecasting every year. Economics done right should be boring. Never forget: you want to be the detective, not the troll.

So far this year, every existing home sales print has been higher in 2021 than the closing level of sales in 2020, which was 5.64 million. With only three reports left in the year, we can safely say that existing home sales in 2021 will be higher than 2020 levels. Also, 2020-2021 will have more home sales from mortgage buyers than any single year from 2008-2019. This looks perfectly normal to me.

One thing about this report is that it’s better than the sales trends I was looking for in 2021. Earlier in the year, I wrote: “The rule of thumb I am using for 2021 is that existing home sales, if they’re doing good, should be trending between 5,840,000-6,200,000. This, to me, would be considered a good year for housing.”