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.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
bankrupt JPM buy silver's picture

Average foreclosed home in US that sells hasnt made a payment in 2 years now.

Change?  YES WE CAN!

trillion_dollar_deficit's picture

My landlord is in the process of being foreclosed on. I havent paid rent going on three months now. Stories like this excite me since I could theoretically live rent free for the next two yrs.

Jeff Lebowski's picture

I havent paid rent going on three months now.


My landlord is in the process of being foreclosed on.

Any correlation?

trillion_dollar_deficit's picture


He wasnt paying the mortgage with my rent money, so it went into foreclosure process. I then stopped paying rent. Waiting for an auction date now.

MachoMan's picture

Heh...  if the landlord can't pay the bank, he can't pay you for breach of your lease...  even after the auction, they'll still have to oust you in accordance with local law...  here, it's like trying to pry off a seed tick.

In the end, can't get blood from a turnip...

Hopefully you don't get third party'd in to the foreclosure lawsuit...  worst case scenario, you'd probably have to pay back rent into the registry of the court...  (remember, you are getting something of value in exchange for nothing)...  might get hit with attorneys fees, but I'd hope not if you cooperated...  might even be able to settle/vacate, which would save them a shit ton of work/fees and could give possession to whoever buys at auction...  just a thought.

The neat part is, you can probably find a place down the road that's abandoned and can be rented on the cheap...  rinse, repeat...

trillion_dollar_deficit's picture

The wife's an attorney, so she's up on all legalities. My state gives tennants 90 days after the auction date to vacate the premises. Its a new law passed in 2008 to protect people in my situation from getting forced out overnight. We have to pay the new owner rent for those 90 days though. So, the longer the auction date held off, the more free rent.   

DOT's picture

How's her tax law ? 

If your current landlord forebears, you will probably be asked( required  )to pay tax on the imputed income.

Roger O. Thornhill's picture

Lawrence Yun - the NAR's hack economist - is literally wrong, everytime. Why anyone even listen to this hack's fairy tales is the real story here.

His predecessor David Lereah wrote a book about not missing the housing boom is 2005 - just amazing.

For some good laughs go and watch Yun's predecessor getting mocked.

etrader's picture

Its just the usual HFT game on the ES when they flush the depth.

Nanex (via ftalpha) had a note on the silly game.

"At lower depth levels, it becomes much easier for someone to move the eMini price suddenly — at the reduced level you only need to buy or sell about 1,000 contracts to run through 3 to 4 levels of the book immediately.

That causes an explosion of quotes and trades on the related ETFs, equities and options — the level of data nearly always causes saturation and delays — from cqs to direct feeds."

BlackholeDivestment's picture are out of order.

                           Bush Hussein

                          King of Babylon             

            that's contempt.

Caviar Emptor's picture

We're celebrating bailouts today! 

In just the last 2 days Greece receives it's tranche and the US bails itself with positive news on raising the debt ceiling. 

It's a win-win-win-win-win!! !!

gwar5's picture

The stock market better surge, or there will be no hopium left at all. Ben is a one trick pony.

Caviar Emptor's picture

Always was. Always will be. It's good to have an old faithful

alien-IQ's picture

Due to the high gas prices many would be home buyers were unable to afford the fuel for their cars therefore were unable to make it out to the closing of their new 500k McMansion....However...we do have this lovely bridge you can buy from the comfort of your own living room...

lizzy36's picture

second derivative shoots.......LEH2.0......bailout #12......QE6......AND JUST BTFD.

Mr Lennon Hendrix's picture

Algo Zombies from Hell part 6!

monopoly's picture

And many are just beginning to not pay their mortgage. Owner of a small business who is a friend is stopping payments on his house in July. Paid $270,000 for his house, took out a second, recent apprasial at $120.000. Time to give it back to AIG, the honest banker. Rigghhtt.

snowball777's picture

Sore loser who still has a house; how long is he planning to squat there for free?

MachoMan's picture

Pretty much...  although, at least he leveraged up to try and produce rather than simply to consume...  (giving him the benefit of the doubt on his business startup).

snowball777's picture

Mr. Yun, the weather has been fine here...and so has the Case/Shiller report. The price of gas will have more effect on the ability of those on the edge to continue making their payments. Best of luck with that!

Mr Lennon Hendrix's picture

It's bullish because Obamarang has more suckers to throw fresh hot sticky cash at!

AbandonShip's picture

damn those numbers are highly suspicious.   They juuuuuust beat the expectations by -->this<-- much.  Yun should be removed from his post.  Weather and gas? Did he borrow Bernocchio's field manual?

Caviar Emptor's picture

Shopping Macht Frei 

monopoly's picture

Question all. Are we paying for Mrs. Obama's trip for her daughters, nicece, nephew and her mother. What the hell is that all about? We are freaking broke and are paying for her trip.

ebworthen's picture

But of course we are.  Don't they deserve a Safari?  Just think of the stories they can tell at the inner-city elementary schools and the pictures, oh, the pictures. 

Hedgetard55's picture

This is just the second half of yesterday's double POMO hitting the markets.  :~)

Paralympic Equity's picture

I don't even try to understand this market anymore, It's the worst feeling for a trader, when you know you are right, but the market thinks different.

Now the market jumped on ISDA saying that AIB in fact defaulted.

LongBalls's picture

Agreed. I pulled my money off the table for now. Up is down and down is up. Tomorrow up will be up and down will be down. Frustrating! BTFD in PM's I will go!

JohnnieWalker's picture

As long as the middle class get squeezed on all sides, the savings period for a home purchase in the US will probably mirror that of Beijing, China where it now takes 57 years of saving for the average resident to cover the cost of an apartment purchase.

JohnnieWalker's picture

As long as the middle class get squeezed on all sides, the savings period for a home purchase in the US will probably mirror that of Beijing, China where it now takes 57 years of saving for the average resident to cover the cost of an apartment purchase.

SheepDog-One's picture

'House shopping'...AHH HA HA HAAAA! Hey honey what do you want to do today? Well, we could go 'shopping' for a new house, but gasoline is SO expensive I dont think we can afford to drive!

Josh Randall's picture

Exactly - these kind of BS explanations only play to the LIESMAN's of the world

ATM's picture

High gas prices are his excuse? The average driver uses about 750 gallons per year. $4 gas v $3 gas is the reason this fuck think people are not buying homes?

If $750/yr is the difference between owning and renting than of course lending requirements have swung too far!

Holy Mother of God.....this is what it's come to I guess. Pure, unadulterated stupidity is what passes for reason.

Perhaps this nob should think for a second. Why would anyone buy a house right now when prices are dropping every day? Why would anyone buy as prices drop? Why would anyone with half a brain buy now with a shadow inventory sitting there waiting to hit the market at any time?

This shithead passes off flodds as a reason? Hey dipshit didn't those floods reduce the volume of vacant houses while also increasing demand for new homes in those areas?

He should use the socialist economic that destruction of property is good for the economy! Think of all the new jobs building all those new homes that aren't necessary. who cares about destroyed wealth, we've got new houses to build with someone elses money!

smithcreek's picture

I don't have the energy anymore to rant, so I'll just say ditto.

Libertarian777's picture

Hey if I take out a 2/2000 year arm and can get a $3million McMansion for that $750!

r101958's picture

'Pure, unadulterated skullduggery' is probably a better term.

digalert's picture

"weakness was due to Spiking gasoline prices" ?

Someone struggling with gas prices probably shouldn't be looking at buying a home.

snowball777's picture

Precisely, "Honey, it looks great and we wouldn't even have to replace the counters because they're already granite,'s more than a gallon away...oh, well".

alien-IQ's picture

they now have such little regard for the intelligence of the average investor that they don't even bother to carefully craft the lies. they just throw any bullshit out there assuming it will all stick....It's insulting really.

MachoMan's picture

I saw a house hunters or first house or one of those shows the other day...  the couple was contemplating purchasing a house for $210k.  They offered $195k and asked the seller to pay for $7k of closing costs...  the seller countered with $211k and would pay $7k in closing costs...  they refused because they "could not afford it."  Really?  If you can't afford that price difference, then your default risk should be at maximum level given you literally have no margin for error...  crazy...

crap like this all the time...  buyers trying to renegotiate right before closing...  you name it...  crazy...

RobotTrader's picture

Looks like the market has turned today, I'm going long.

Short sellers must take their bacon right away, its like pulling teeth out of a crocodile.  Wait too long and you will get your hand bitten off.

Even the crappy gold stocks are moving up after getting utterly brutalized by 30% - 50%.

snowball777's picture

You're a day late.

Fuck your buy-side jedi mind-trick...the force is weak with you.

etrader's picture

Is that the Robo compression ES short signal  now they had the Gap orders ;-)

alien-IQ's picture

you will be reversing that position before the day is over.

/ES gaped up 7 points at the open, then spiked on bad housing numbers.

This isn't a reversal, it's a trap.

statlawyer's picture

nasdaq leading the market higher... bullish lol

Cdad's picture

So you are chasing two consecutive, low volume, engineered gap up days...after weeks worth of brutal economic data...ahead of Truth arriving on the continent of Europe.  Really? should probably have a chat with your risk manager.

buzzsaw99's picture

this market is like a willow. the branches bend in the wind but the rot runs deep and will not stand the test of time.

The Axe's picture

i agree Robot  you post is late....shorting aapl using a july vert. spread....320/115 puts.... stocks are parabolic also short 1000 CRM