For the "dismal science" of economic forecasting, April 24 was one of the most dismal days in memory. Before that day, the consensus forecast among 60 leading economists for March existing homes sales was 6.45 million (seasonally adjusted annual rate), with none of them predicting a rate below 6.2 million. On that day, the National Association of Realtors (NAR) released data reporting sales of 6.12 million, for a 13% year-over-year (YOY) decline.
In published comments, several economists called the unexpected March decline a cyclical bottom in housing. On CNBC, analysts interpreted it as clear evidence that the subprime problem had been contained, and they encouraged investors to buy stocks of homebuilders.
April 24 was a dark day not only because so many leading economists and analysts missed an inflection point in the U.S. housing market, which came in early March as the subprime issue exploded into the headlines. April 24 also was dismal because mountains of evidence, freely available on the Internet, should have alerted these professionals to a serious downturn in the market in March – with more damage to come.
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