The number of Americans who bought previously occupied homes rose last month. But the National Association of Realtors says it overstated more than 3 million sales during and after the Great Recession, showing the housing market was weaker than previously thought.

The private trade group says sales rose 4 percent last month to a seasonally adjusted annual rate of 4.42 million. That's below the roughly 6 million homes a year that economists say are consistent with a healthy housing market. But it's ahead of 2008's revised sales, now considered the worst in 13 years.

The trade group revised its sales from 2007 to 2010 down 16.7 percent, from nearly 17.7 million to 14.7 million. Among the reasons for the lower figures, the Realtors group says: changes in the way the Census Bureau collects data, population shifts and some sales being counted twice. Last year's reported total sales figure of 4.91 million was the worst in 13 years.
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The Realtors consulted with government and private housing experts, including the Federal Reserve, the Department of Housing and Urban Development, the Mortgage Bankers Association, the National Association of Home Builders, mortgage giants Fannie Mae and Freddie Mac and CoreLogic, a California-based data firm that first raised doubts about the annual numbers earlier this year.

CoreLogic has estimated that the Realtors group overstated sales in 2010 by at least 15 percent.

The changing numbers could affect how economists view the trade group's data. It could also affect companies that use the figures for hiring and expansion plans.

Sales are measured when buyers close on homes. But many deals are collapsing before that point. One third of Realtors said they had at least one contract scuttled in October, up from 18 percent in September.

Contracts are being cancelled for several reasons: Banks have declined mortgage applications; home inspectors have found problems; appraisals showed a home was worth less than the bid; a buyer lost a job before the closing.

More than two years after the recession officially ended, many people can't qualify for loans or meet higher down-payment requirements. Even those with excellent credit and stable jobs are holding off because they fear that home prices will keep falling. Sales are also being hurt by a decline in first-time buyers, who are critical to reviving the housing market.

Sales have fallen in four of the five years since the housing boom went bust in 2006. Declining prices and record-low mortgage rates haven't been enough to boost sales.

At the same time, home construction has begun a gradual comeback and should add to the economy's growth in 2011 for the first year since the Great Recession began in 2007. Last month, builders broke ground on an annual rate of 685,000 homes, the government said Tuesday. That was a 9.3 percent jump from October and the fastest pace since April 2010.

Most economists say home prices will keep falling, by at least 5 percent, through 2012. Many forecasts don't foresee a rebound in prices until at least 2013.

The high rate of foreclosures has made resold homes cheaper than new ones. The median price of a new home is roughly 30 percent above the price of one that's been occupied before — twice the normal markup. Investors are taking advantage of the discounts.

The housing market is struggling even as the broader economy has improved in recent months.

The economy grew at an annual pace of 2 percent in the July-September quarter. Many economists expect slightly better growth in the October-December quarter.