Housing Double Dip Accelerates As Existing Home Sales Plunge -2.2% In May Versus 6.0% Consensus, Down From 8% In April

Tyler Durden's picture

May existing home sales plunged far below expectations, coming in at an
annualized -2.2% rate, compared to consensus of 6.0%, and a revised 8%
in April. This is the second worst monthly drop in history, and shows
just how very wrong economists are, and how they will all have to
revise their outlooks lower, for all macro indicators including GDP.
The plunge occurred even despite near record low 30 year mortgage
rates: the Freddie 30-year, conventional, fixed-rate mortgage fell to
4.89 percent in May
from 5.10 percent in April; the rate was 4.86 percent in May 2009. The
push forward effect of the administration's various subsidies is now
over and a double dip is likely now inevitable unless yet another
stimulus plan is implemented. There is nothing quite like the
administration finding a scapegoat du jour: first it was snow in
winter, then hot weather in the spring, now it is the oil spill: "Florida and
Louisiana, also impacted by the oil spill, have the highest percentage
of homes that require flood insurance

From NAR press release:

Existing-home sales remained at elevated
levels in May on buyer response to the tax credit, characterized by
stabilizing home prices and historically low mortgage interest rates,
according to the National Association of Realtors®. Gains in the West
and South were offset by a decline in the Northeast; the Midwest was

Existing-home sales1,
which are completed transactions that include single-family, townhomes,
condominiums and co-ops, were at a seasonally adjusted annual rate of
5.66 million units in May, down 2.2 percent from an upwardly revised
surge of 5.79 million units in April. May closings are 19.2 percent
above the 4.75 million-unit level in May 2009; April sales were revised
to show an 8.0 percent monthly gain.

Lawrence Yun,
NAR chief economist, said he expects one more month of elevated home
sales. “We are witnessing the ongoing effects of the home buyer tax
credit, which we’ll also see in June real estate closings,” he said.
“However, approximately 180,000 home buyers who signed a contract in
good faith to receive the tax credit may not be able to finalize by the
end of June due to delays in the mortgage process, particularly for
short sales.

 “In addition, many potential sales are being delayed by an
interruption in the National Flood Insurance Program. Florida and
Louisiana, also impacted by the oil spill, have the highest percentage
of homes that require flood insurance
.”As the leading advocate for homeownership
issues, NAR is supporting Senate amendments to extend the home buyer
tax credit closing deadline through September 30 for contracts written
by April 30, and to renew the flood insurance program. “Sales and
related local economic activity would have been higher without delays
in the closing process or flood insurance issues,” Yun noted.


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Agent P's picture

Tax credit, bitchez.

Binding contracts needed to be in place by April 30...did you notice April was revised higher?  Demand was pulled forward.  I'm not at all surprised May dropped like a rock.  Look at auto sales around cash for clunkers, it was the same pattern...spike followed by drop...the only question is whether we'll see a steady incline in the coming months (as we did with auto sales).

That being said, I'll admit the surveyed economists must have been smoking crack given the consensus estimate.

unwashedmass's picture



DRV is a triple bear housing ETF......it has gained just ten cents since the numbers....tens of thousands of shares of this are being SOLD....who is selling  THIS....NOW?

ah......i'm from the government, i'm here to help...

dvsteenk's picture

still up 10% since yesterday, and moving

thanks for the ticker - does it exist in double bear also?

Dr. Richard Head's picture

So the equity markets should skyrocket on this news right?  Gold should get hammered and all financials to the moon?  This analyst stuff is easy.  Just waiting for the networks to give me a call. 

HarryWanger's picture

And SPX dropped a whole 2 points! With all the negative news over the past couple of weeks, it's pretty astonishing that we're not sitting below 1000 SPX today.

HelluvaEngineer's picture

Perhaps, if any humans were trading this market...

subqtaneous's picture


I believe someone recently said:


Stupid, Rapacious, Arbitrary, Capricious And Downright Ridiculous


Turd Ferguson's picture

It's desperation time, Harry. We stand at the precipice. It is close to unraveling.

1) Stocks NOT allowed to go down.

2) Crimex faces delivery emergency for June.

3) BP heads toward zero in the face of unending spill and hurricanes.

4) The entire Middle East is playing brinksmanship.

5) European banks insolvent.

Too many holes to plug. Too many moles to whack. Whatever metaphor you want to use is fine, just know that the "system" is about to collapse.

Young's picture

It's not just the bots (although mostly), the buy on dips/buy and hold folks of the 40s, 50s and 60s think this is a bargain (I should stop speaking to these people if they are not frequent ZH visitors)... This is starting to resemble the Steven Seagal movie Hard to kill. Steve plays the market. Close to death he gets help from his little jewish bearded friend Benny Boom and he manages to claw back from certain death... All the while I'm just thinking: Why won't you just die Steve, just fucking die. My apologies Steve, don't kill me just cause I used you as an example. Please don't kill me :(

Young's picture

Jesus, Steve not only runs like a girl, he runs like a re-tard. "Excuse me Allen, it's called a reeeetard". Look at his hands...

RockyRacoon's picture

Ease up!  The transition from Stephanie was tough.

Cognitive Dissonance's picture

First good laugh of the day. Thank you RR.

NOW I know why I haunt ZH. :>)

Whizbang's picture

Jesus turd, I've heard the same crap now for three years. Still waiting for "the whole system" to collapse...

ZackAttack's picture

It's amazing to me that it's not up further on the end-of-quarter markup pre-game show.

Turd Ferguson's picture

Well...the 28-day bill is showing 1 bp again today, same as yesterday.

Would seem to me that there is significant money wanting nothing to do with stocks.

Cognitive Dissonance's picture

"Housing Double Dip Accelerates..."

This isn't what CNBC's Bob Piss-on-me said, though he did admit that we can't even have a leveling off in home sales but a continuous rise if we're to fully recover.

But he went on to declare that all the economic news is great except housing sales. What planet is Bob Piss-on-me from anyway? Sirus?


Opps, not that Sirius. This one. :>)


Turd Ferguson's picture

Bob Pisani is not just your regular, run-of-the-mill douchebag. He's a gigantic, jizz-infused, yeast-infected, mildew-lined, sulfur-stenched douche balloon. 

The worst of the worst.

Cognitive Dissonance's picture

Don't hold back TF, tell us what you really think. :>)

BTW who's doing the jizz infusing? Just askin'.

Turd Ferguson's picture

Dennis Kneale and Steve Liesman after pulling a train on Maria.

Flakmeister's picture

 Pisani should just go off into a corner and fist himself....

Turd Ferguson's picture

What do you think he's doing when he's not on camera?

aheady's picture

Coffee just came out of my nose.

Ned Zeppelin's picture

Pisani was recently told by a specialist that he suffered from an intestinal blockage that could be easily remedied if he would just remove his head from his ass.

Cognitive Dissonance's picture

I would have paid $99.95 for that pay-per-view. Best $100 I would've blown for 10 seconds of fun.

Well, second best. :>)

The Rock's picture

i think he prefers a circle jerk with his buddies down on the floor

LeBalance's picture

And through the Dog-Star reference, we find another Dog Star and his arch enemy up to no good.  Hey wait a minute, this plot seems to have "just" a few things to say about the present calamity.  Is someone resource grabbing?


Or outcome steering...

you can watch the whole thing or 4:50 to 5:10, for instance.

Same script writers?

Double down's picture

He is not from the "Big Dog", I never saw him there

Calculated_Risk's picture

Can't stand bob.. it's like he gets a bonus for every ass he kisses.

< smooch, jobless recovery! > ding! $100k

< smooch, housing is great! > ding! $100k

< smooch, equities are undervalued! > ding! $100k

yabs's picture

yeah easy to spin

although the spill is likely to affect property values adversly in the short term

as well as tourism ,fishing industries and future oil drilling the economy is fundamentally strong and investors should concentrate on the big picture

and the nascent recovery.

HarryWanger's picture

Just think, if we didn't have that oil spill how great home sales would have been. Problem is we DO have that oil spill. Spin it any way you want, we DO have an oil spill and it ain't going away any time soon.

Al Huxley's picture

Not to mention that its also not the root cause of the slump in housing.  Nevertheless, the news generally doesn't move the markets, although after that little relief rally over the past few weeks I expect the market's ready to recognize this as bad news, even if the CNBC/Bloomberg cheerleaders aren't.

Village Idiot's picture

Don't worry, people, builders association says it "could" have been a jam in the pipeline - buyers couldn't close in time. Right.

HelluvaEngineer's picture

That happens when you haven't paid your other mortgage in 2 years

Mentaliusanything's picture

Oh there is a "jam in the pipeline" alright. When it finally shifts someone's going to need a lot of tissues to clean up after the porcelain gets sprayed - bigtime!

yabs's picture

wow has even harry capitulated?

is this the time to short?


trillion_dollar_deficit's picture

All part of the plan. Bring on QE 2.0. 

Attitude_Check's picture

Yep,  I am beginning to seriously believe that is "the plan", then once Hyperinfltion kicks-in, intentionally spike the Gold-price (stop/reverse the price manipulation and let he COMEX detonate).

 With Gold at some insane price point, issue the "new-dollar" that is Gold-backed, and all the "old dollar" debt becomes nearly worthless.  The hope is they can hang-on long enough that China's inflation and malinvestment driven by thier foolish $-peg causes them to explode.

The new-dollar reset, will trigger huge deflation, because thier will be so few of them.  Having assets you OWN will help ease the transition in maintaining purchasing power.  Owning Gold will be best however.

jbc77's picture

Second worst monthly decline in history and the S&P is down twon handles, looks like the insanity continues.

HarryWanger's picture

That 200 dma is being held with all the might they have, just like yesterday. When she finally goes, it could be fast and really, really ugly.

jkruffin's picture

It's going to fall, and you are right, its going to be ugly when it does.

Turd Ferguson's picture

Nic had it about right in the morning update. Add to your shorts under 1103. Lighten is up thru 1118.

firstdivision's picture

End of day stick save, my nuts tell me so.

anynonmous's picture

Make no mistake, if there were any signs of life in the Florida real estate market, the oil spill will send it into the abyss. 


this from June 11 (I think the estimate is way low)

Oil Spill May Cost $4.3 Billion in Property Values




(and WTF has bloomberg done to their website)

digitalhermit's picture

"(and WTF has bloomberg done to their website)"

Addicted to the old black background? Try: http://noir.bloomberg.com/

jkruffin's picture

The consensus I saw yesterday was 7.5% so the numbers are worse than they are willing to admit, since they changed consensus to 6%.   This market is going DOWN!!!