Lawler: Some Observations on the February Existing Home Sales Release

Key Takeaways

• NAR now releases existing home sales 10 days earlier.
• Early releases lead to larger subsequent data revisions.
• Jan sales revised up 5,000 units; SAAR 4.02M.
• Feb SAAR likely revised down to 4.03M from 4.09M.
• Median home price YoY rise expected near 1% after revision.

Summary

The National Association of Realtors moved its existing‑home‑sales release about ten days earlier, a change that Tom Lawler says will likely generate larger-than‑usual revisions. January’s non‑seasonally adjusted sales were revised up by 5,000 units, pushing the SAAR to 4.02 million from a preliminary 3.91 million. Lawler projects February’s SAAR will be cut to roughly 4.03 million from the initial 4.09 million estimate, while the year‑over‑year median price gain should be revised up to about 1 percent. He also notes a shift in FOMC dot‑plot expectations, with over half now seeing a long‑run fed funds rate above 3 percent.

Pulse Analysis

The National Association of Realtors’ decision to publish its existing‑home‑sales figures earlier each month introduces a new timing dynamic for analysts. By shortening the data‑gathering window, the agency relies more heavily on preliminary inputs from local MLS systems, which historically have been less stable. Consequently, the probability of sizable revisions—both upward and downward—rises, compelling investors, lenders, and policymakers to treat early releases as provisional signals rather than definitive benchmarks.

January’s revision exemplifies this volatility: a modest 5,000‑unit increase translated into a 110,000‑unit jump in the seasonally adjusted annual rate (SAAR), moving from 3.91 million to 4.02 million. Lawler’s projection for February suggests a similar downward correction, trimming the SAAR from 4.09 million to about 4.03 million and nudging the median price growth YoY from 0.2 percent to roughly 1 percent. These adjustments matter because housing‑market metrics feed directly into mortgage‑rate expectations, construction planning, and consumer‑confidence indices, meaning even small shifts can ripple through broader economic forecasts.

Beyond housing data, Lawler highlights a notable evolution in Federal Open Market Committee (FOMC) expectations. In December 2021, no participant anticipated a long‑run fed funds rate above 3 percent, yet the latest dot‑plot shows a majority forecasting rates higher than that threshold, despite all assuming a 2 percent inflation target—an assumption that currently diverges from reality. This pivot signals a more hawkish stance among policymakers, potentially influencing bond yields, equity valuations, and the cost of capital for home‑buyers. Together, the revised housing figures and shifting Fed outlook underscore a period of heightened uncertainty that market participants must navigate with caution.