So Much For Housing Optimism: Existing Home Sales Miss, Drop To Lowest Since November, Order Cancellations Surge

Remember that surprisingly strong home starts data from yesterday which drove the market by 100 DJIA points higher yesterday? Neither do we. According to the NAR, June existing home sales once again declined, this time to 4.77MM from 4.81MM, the lowest since November, and well below the expected rise to 4.90MM. This number was 8.8% below June 2010's 5.23MM. Total inventory increased by 3.3% to 3.77 million units, or 9.5 months of supply at the current sales rate up from 9.1 in May. The biggest question mark is the surge in order cancellations which soared from 4% in May to an unprecedented 16% in June. That's one in five home transactions being cancelled in the middle of the deal. Here is Larry Yun's explanation for this shocking development: "The underlying reason for elevated cancellations is unclear." So let's get this straight whenever the number is better than expected it is always due to the economic recovery. When it is worse, it is "unclear." Thanks Larry. Now go back to fudging data please.

More from the traditionally irrelevant and discredited NAR:

Yun cited other factors in the sales performance. “Pending home sales were down in April but up in May, so we may be seeing some of that mix in closed sales for June. However, economic uncertainty and the federal budget debacle may be causing hesitation among some consumers or lenders.”

The national median existing-home price2 for all housing types was $184,300 in June, up 0.8 percent from June 2010. Distressed homes3 – foreclosures and short sales generally sold at deep discounts – accounted for 30 percent of sales in June, compared with 31 percent in May and 32 percent in June 2010.

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said home sales should be higher. “With record high housing affordability conditions thus far in 2011, we’d normally expect to see stronger home sales,” he said. “Even with job creation below expectations, excessively tight loan standards are keeping many buyers from completing deals. Although proposals being considered in Washington could effectively put more restrictions on lending, some banking executives have hinted that credit may return to more normal, safe standards in the not-too-distant future, but the tardiness of this process is holding back the recovery.”

All-cash transactions accounted for 29 percent of sales in June; they were 30 percent in May and 24 percent in June 2010; investors account for the bulk of cash purchases.

First-time buyers purchased 31 percent of homes in June, down from 36 percent in May; they were 43 percent in June 2010 when the tax credit was in place. Investors accounted for 19 percent of purchase activity in June, unchanged from May; they were 13 percent in June 2010.

Single-family home sales were unchanged at a seasonally adjusted annual rate of 4.24 million in June, but are 7.4 percent below a 4.58 million pace in June 2010. The median existing single-family home price was $184,600 in June, up 0.6 percent from a year ago.

Existing condominium and co-op sales fell 7.0 percent to a seasonally adjusted annual rate of 530,000 in June from 570,000 in May, and are 18.0 percent below the 646,000-unit level a year ago. The median existing condo price5 was $182,300 in June, up 1.8 percent from June 2010.

More made up "facts" can be found here.

Comments

[Waterfallsparkles]

Another reason could be Home Inspections.  There are more and more Environmental Inspections.  With all of these inspections if any fails the Buyer can walk.

As an example you have:

Radon

Mold

Lead Paint

Water Potability

Well Yield

[Problem Is]

Lawrence Yun: Propaganda Hack Extraordinaire
Larry is the private sector version of a B(L)S econometric genius... which DNE...

[Woodyg]

The housing market is stuck - the banks can't sell off all the vacant foreclosed homes they hold because it would prove how massively Bankrupt they are - add to that the MERS fraud mess and it's SNAFU!

Look for the next president - whether the oilybomber or romney - to forgive the banks their massive fraud commited upon the American public.

[Hacksaw]

The author of this article tries to make the point that housing production falling from just over 2million units in 2006 to just under 600 thousand in 2011 is a good thing for the housing market. I think that fact makes the current sales and price numbers look all that much worse.

http://www.businessinsider.com/record-low-housing-completions-2011-2011-7

[Problem Is]

When Will Housing Cheerleaders Quit Lying With Nominal Dollars?
Okay, look at this:

"Yun cited...The national median existing home price for all housing types was $184,300 in June, up 0.8 percent from June 2010."

So according to Yun:

1. 2011 median price for June is $184,300 an 0.8% increase.
2. 2010 median price was $182,837 based on Larry's calculation.
3. Adjusting for 3.5% Bernank devaluation 2010 to 2011, (You can calculate here)...$182,837 in 2010 would require $189,266 in 2011 dollars just to break even.
4. Thus, $184,300 is a 3.4% loss, not a 0.8% gain...

So STFU Larry and every Obama Bin Lyin' administration douche-bag who repeat the same fallacies and lies...

See why those in power want you to fail math...

[FMR Bankster]

Why the 16% cancelations? Appraisals and deadbeats. But mostly deadbeats. Lots of people don't realize times have changed and when they walk in with their 560 credit scores (just like they had in 2006) they find out theres no loan money for them. (and never will be unless theres a new gov'ment program)

[KCMLO]

“Even with job creation below expectations, excessively tight loan standards are keeping many buyers from completing deals. Although proposals being considered in Washington could effectively put more restrictions on lending, some banking executives have hinted that credit may return to more normal, safe standards in the not-too-distant future, but the tardiness of this process is holding back the recovery.”

So he flat out lies, then sorta hints at the real truth.  Fact is, lender's underwriting guidelines are actually getting loose again.  The problem is, with all the additional regulation, and just shitty performance overall, most lenders are laying off workers like it's trendy.  With the few workers they retain, they bury them in work and even well-qualified borrowers' transactions stretch out for two or three times as normal.  Then the house they're buying keeps dropping in value and the borrower gives up.  This is a much bigger problem than many realize.  Apparently NAR doesn't either considering they can't explain the spike in cancellations...