Monday, July 09, 2007

More on Freddie Mac Housing Forecast

by Bill McBride on 7/09/2007 10:53:00 PM

The details of Freddie Mac chief economist Frank Nothaft's housing forecast are now available.

Nothaft is predicting combined new and existing home sales will fall to 6.28 million this year (2007), but Nothaft is only counting "new and existing detached single-family homes". (emphasis added).

So adjusting for total sales, Nothaft's estimate is around 7.05 million for 2007; this is significantly above my estimate of 5.6 to 5.8 million existing home sales (including attached homes) and 0.85 new home sales.

As an aside, the Bloomberg story used 6.2 million for 2001:

Sales of new and previously owned homes probably will total 6.28 million, according to the world's second-largest mortgage buyer. That would be the lowest since 6.20 million in 2001.
The 6.2 million number is total sales, including attached homes, and is not comparable to Nothaft's forecast. This is an error in the Bloomberg story.

Finally, it is pretty clear that Freddie Mac's forecast is already wrong. Sales would have to pickup to reach their forecast, and that seems very unlikely.