Housing sales may be worse than data show

Milwaukee Journal reports:

Here's a scary thought about the housing market: Things may be far worse than what's already being revealed by the troubling government and industry statistics.


At issue is what goes into sales price data and what does not. When those numbers are crunched, many of the incentives that sellers are using to lure buyers - including cash rebates - aren't being included. That suggests prices may be falling faster in many markets than is now being reported.

The same goes for how the mortgage-application indexes don't account for the implosion of lenders. That could have the effect of masking a slowdown in demand, which is why the housing market could be in for rough sailing much longer than most anyone anticipates.

Not long ago, the housing market was leading the economy's growth. But the business has slumped over the last two years in many parts of the country, with sales of new and existing homes plunging. The mortgage business also is under intense stress as borrowers with weak credit increasingly default on their home loans.

A good read.