Yun: Year-over-year date key

When I spoke to Lawrence Yun, the chief economist for the National Association of Realtors this morning, I told him that earlier this week that Metrolist released a report that showed while homes placed under contract rose 15.4 percent in March from February, they were down 17.8 percent from March 2008.

I told him I thought the year-over-year number was more important, because of the seasonality of consecutive month data.

“You are absolutely right to pay more attention to the March to March data, “Yun told me. “There is too much seasonality in month-to-month figures.“

I also told him that by my calculations, the home sales equated to $806.57 million in sales in March, a $212.26 million drop from the $1.01 billion in sales in March 2008.

I asked him to talk about how the drop in dollar volume in the economy goes far beyond the housing industry.

“Absolutely, the housing market has a very big impact to the economy, therefore, this housing situation is critical to the overall stimulus package,” Yun said. “If the housing market continues to be soft, it is going to hold back the entire economy. So it is critical that the low mortgage rates and the tax credits for first-time home buyer help deal with the anxiety and lack of confidence that people are feeling.“

He also pointed out that even if the unemployment rates hits 10 percent, that will mean that 90 percent of the people are continuing to work. Hopefully, he said, people, as they feel more secure at their jobs, will take the plunge and take advantage of low mortgage rates.
“But I would like to make one comment: One lesson from the past boom and bust is that people should buy a home within their budget.”