If you believe the US jobs report last month was a fluke and the US economy is just peachy, then the latest report on US home sales should make you happy.

The National Association of Realtors (NAR) on Wednesday said sales of existing homes rose 1.8% in May to an annual rate of 5.53 million units, the highest level since February 2007, as improving supply increased choice for buyers.

This far exceeded the forecast of economists polled by Reuters. They predicted sales rising 1.1% in May. Sales were up 4.5% from a year ago. April sales were revised down to 5.43 million units from the previously reported 5.45 million units.

The median house price rose 4.7% from a year ago to a record $239,700 last month

Together with recent retail sales data the strong home resales show an economy growing, a much different economic outlook than the one projected by last month’s paltry job gains.

That is if you fail to remember that most of the buying is being done by Chinese people trying to get as much of their money out of China as they can before the People’s Bank of China devalues the yuan again. Last year, the NAR reported that Chinese buyers had replaced Canadians as the top foreign buyers of US homes.

And one shouldn’t forget that the NAR couldn’t see the housing bubble even as it stared them in the face. The report from this trade organization for home sellers isn’t an official economic gauge, but rather positive public relations for the people who sell homes for a living. Don’t forget the NAR told the US that 12 months before the housing bubble popped in 2007 was the perfect time to buy a house.

In fact, as ZeroHedge reminds us Larry Yun, the chief economist at the National Association of Realtors has such a horrible record of forecasting that his 2006 forecast won an entry in Bloomberg’s worst predictions of 2006.

Yun predicted: The national median home price will rise about 6.1% in 2006. Over a full year, it “has never declined since good record-keeping began in 1968.”

Of course, we all remember that through October, the median price of residential properties fell 3.5% from a year earlier.

For a full reporting of the NAR’s and Yun’s lack of credibility check out the Lawrence Yun Watch.

After you do that, Asia Unhedged recommends you take this report with a grain of salt and wait for some real, valid economic news before deciding the economy is on steady ground.

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