Market Surges After Existing Home Sales Drop, Print At 4.81MM On Expectations Of 4.80MM

Tyler Durden's picture

More lies from the discredited, conflicted and data manipulating NAR which for some stunning reason continues to move the market, even more paradoxically after the existing home sales number came at 4.81 million on expectations of 4.80 million: if there ever was a Gargantuan beat of expectations, this is it. But courtesy of a prior downward revision which took down the April number from 5.05 million to 5.00 million, the decline was 3.8% instead of the expected 5.0%. Total housing inventory at the end of May fell 1.0 percent to 3.72 million existing homes available for sale, which represents a 9.3-month supply4 at the current sales pace, up from a 9.0-month supply in April. Somehow this sends futures up nearly half a percent. And from the master of mendacity, the one and only Larry Yun, the weakness was due to "Spiking gasoline
prices along with widespread severe weather hurt house shopping in
April, leading to soft figures for actual closings in May." Obviously there is never a simple explanation for deteriorating economic data such as people don't actually have money...

NAR lies continue:

Existing-home sales were down in May as temporary factors and
financing problems weighed on the market, according to the National
Association of Realtors®.

Existing-home sales1,
which are completed transactions that include single-family, townhomes,
condominiums and co-ops, fell 3.8 percent to a seasonally adjusted
annual rate of 4.81 million in May from a downwardly revised 5.00
million in April, and are 15.3 percent below a 5.68 million pace in May
2010 when sales were surging to beat the deadline for the home buyer tax

Lawrence Yun,
NAR chief economist, said temporary factors held back the market in
May, as implied from prior data on contract signings. “Spiking gasoline
prices along with widespread severe weather hurt house shopping in
April, leading to soft figures for actual closings in May
,” he said.
“Current housing market activity indicates a very slow pace of broader
economic activity, but recent reversals in oil prices are likely to
mitigate the impact going forward. The pace of sales activity in the
second half of the year is expected to be stronger than the first half,
and will be much stronger than the second half of last year.”

Yun said the market also is being constrained by the lending
community. “Even with recent economic softness, this is a disappointing
performance with home sales being held back by overly restrictive loan
underwriting standards,” he said. “There’s been a pendulum swing from
very loose standards which led to the housing boom to unnecessarily
restrictive practices as an overreaction to the housing correction –
this overreaction is clearly holding back the recovery.”

There were notable regional differences in home sales. “A large
decline in Midwestern existing-home sales can be attributed partly to
the flooding and other severe weather patterns that occurred, but this
also implies a temporary nature of soft market activity,” Yun explained.

The national median existing-home price2 for all housing types was $166,500 in May, down 4.6 percent from May 2010. Distressed homes3
– typically sold at a discount of about 20 percent – accounted for 31
percent of sales in May, down from 37 percent in April; they were 31
percent in May 2010.

“The price decline could be diminishing, as buyers recognize great
bargain prices and the highest affordability conditions in 40 years;
this will help mitigate further price drops,” Yun said.

“Home prices are rising or very stable in local markets with improved
employment conditions, such as in North Dakota, Alaska, Washington,
D.C., and many parts of Texas,” Yun noted.

Much more bullshit at the soure.