I was not a good father today.
Instead, I engaged in laboriously hand-entering data to satisfy a question that has been bothering me for a while.
The issue that was worrying at me was the apparent discrepancy I’d mentally noted between the happy-happy increase in existing home sales, as reported by the NAR last week, and what I remembered from the MBS mortgage application releases.
But who could be sure?
Perceptions can be tricked and need to be tested and subjected to fact-based inquiry.
Confounding things, the Mortgage Banker Association (MBA) application reports are notorious for changing their reporting methodology, most recently (during the past 3 weeks) dispensing with reporting of an absolute number in favor of a simple percentage change. Where, for example, the number used to change from 1000 to 1100, it is now only reported as having changed +10%.
After a few weeks, who can remember what +10%, -4%, -3%, +12% is supposed to mean? I certainly can’t.
At any rate, this shift to a percentage basis altered a convention that went back several years. Now we only get to read the weekly percentage and yearly changes, without the confusing benefit of an absolute number to guide our perceptions. So for those without the time or the inclination to dig through the data, it is what it is.
For me? The only way to resolve this was to obtain all the base data, hand-enter it into a spreadsheet, and see what was up.
Well, this is what’s up:
Where the NAR recently reported a gain of +5% in existing home sales for July09/July08, the reconstructed MBA report shows a -22% decline in purchase applications over the same period (in stark contrast to their misleading recent release, which spoke of a yr/yr gain, but was actually referring to a blended gain that included the highly volatile refi apps):
Where the MBA most recently said that purchase applications have been “trending up,” I am at a loss to see the period of time to which they are referring. I’ve boxed in 2009 for reference, but it is difficult to make a case for “trending up” unless one decides to begin randomly at some point after March.
Note that the data I have is all seasonally adjusted and straight from the MBA, so I doubt we are referring to different data.
At any rate, I am simply not in a position to believe that purchase applications are down 22% yr/yr while total sales are up 5%+. This would imply that nearly a third of all national sales are cash-on-the-barrel.
Sorry. No way. Somebody here is lying.
Somebody Not At all Reliable. However, I will retain my judgments – for now.