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Home Sales Collapse At Fastest Rate In 40 Months; Stocks Spike

Tyler Durden's picture




 

Despite Joe Lavorgna's seemingly gigantic cognitive dissonance in the face of this report, the pending home sales data collapsed in September (and remember this is before the shutdown and was heralded at the time as buyers rushing to buy before the risk of the shutdown slowed acceptances). Affordability, argued by some serial extrapolators as still being 'relatively' positive - has drastically weighed on housing at the margin just as we argued previously. This is the first annual drop in 29 months, the biggest drop in 40 months, and the biggest miss against expectations in 40 months. Even the typically full of spin, NAR Chief economist had to admit "this tells us to expect lower home sales for the fourth quarter, with a flat trend going into 2014." Apparently, if one is to believe the spin, overheard everywhere in September: "Hmm, government may shut down next month - let's not buy a house."

Of course, NAR Chief Economist seems to have found an excuse by time-shifting his narrative...

NAR chief economist, said concerns over the government shutdown also played a role. “Declining housing affordability conditions are likely responsible for the bulk of reduced contract activity,” he said. “In addition, government and contract workers were on the sidelines with growing insecurity over lawmakers’ inability to agree on a budget. A broader hit on consumer confidence from general uncertainty also curbs major expenditures such as home purchases.”

Umm no Larry... because in our world September is before October and no one was talking about shutdown's impact then OR even pricing it in any way...

 

 

none of this should be a surprise given the impact on mortgage activity that higher rates have had...

 

Despite all the chatter that rates are still 'near' generational lows....

Of course - the market loves this crappy data is rallying handsomely as Taper is pushed off once again.

 

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Mon, 10/28/2013 - 10:18 | 4097399 Say What Again
Say What Again's picture

We are well on our way to seeing the SP500 rally on 13 out of 14 days.
The game I play now is to see how bad the news can be and still have a positive day for ES.  I'm convinced that nothing, short of an all out war or natural catastrophe, will bring down this "market".

When making a decision about which way to position yourself in this "market", the only question you need to ask is this -- Is the bernank printing money today?  NOTHING else matters.

Mon, 10/28/2013 - 10:24 | 4097420 slotmouth
slotmouth's picture

Going after Lavorgna is way to easy. I am almost convinced that this guy is paid to make the wrong predictions.  I can't recall a time when he was ever right about anything, which is impressive considering the number of things that he attempts to predict.  Here are a few gems:  Taper for sure in September he also gave specific dollar amounts and the split between MBS and treasuries.  No gov shutdown.  Once the shutdown happened it became a short shutdown that wouldn't last more than a few days.  It seems statistically improbable that he could be wrong so often, especially when he is predicting binary events.

Mon, 10/28/2013 - 10:35 | 4097450 ebworthen
ebworthen's picture

Joe Bologna? 

Classic shill, the shill of shills, the Blitzkrieg Shillmeister of Deutsche Bank AG.

Mon, 10/28/2013 - 10:39 | 4097465 idea_hamster
idea_hamster's picture

I was going to buy a house, but you can't eat it -- so I went all in on Tesla! </sarc>

Mon, 10/28/2013 - 13:01 | 4098081 disabledvet
disabledvet's picture

cheaper to heat actually. No property taxes. Got wheels. I actually saw a used Rolls Royce at a one of the local metal movers and laughed. "what a puny car?" I thought. something about "if it runs I want to take that at max speed down the interstate just once" did pop in my head though. you "how dare you pull me over in my beater Rolls Royce officer. Don't you know who I am?"

Mon, 10/28/2013 - 14:34 | 4098440 Big Ben
Big Ben's picture

At least you can use your burning Tesla to roast marshmallows.

Mon, 10/28/2013 - 10:44 | 4097478 Headbanger
Headbanger's picture

It's the sub-prime disaster deja vu all over again as many of the cash real estate sales were really rehypothecation nonsense.

Are you ready for another "Lehman Moment" soon??

Mon, 10/28/2013 - 11:16 | 4097587 NoDebt
NoDebt's picture

Why, no.  No I'm not.  Is it coming?  It would be best if it would come while I was unprepared.  Just so I could scream "NOBODY COULD HAVE SEEN THIS COMING!"

Mon, 10/28/2013 - 11:54 | 4097757 Element
Element's picture

Relax, it's contained.

Mon, 10/28/2013 - 10:26 | 4097425 Zer0head
Zer0head's picture

NAR chief economist, said concerns over the government shutdown also played a role

 

that is the meme from central control

BBG has been parroting it all morning

 

it is the Government shutdown

also some of the aftermath of Hurricane Sandy

but mostly the Government shutdown

in fact any soft economic numbers will be the result of the Government shutdown

this excuse will expire in 7 months

Mon, 10/28/2013 - 10:18 | 4097400 Obese-Redneck
Obese-Redneck's picture

This just in: former chief Kessler can't afford presents for his kids at Christmas this year because John Kerry is coming for his guns, LOL. Former officer Pike seeking refuge at Ted Nugents home for wayward Libertardians.  

Mon, 10/28/2013 - 11:13 | 4097582 HelluvaEngineer
HelluvaEngineer's picture

At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.

Mon, 10/28/2013 - 11:16 | 4097585 Charles Nelson ...
Charles Nelson Reilly's picture

Obese-Redneck.  Creative name dude.... did you steal that from someone at HuffPo?

Mon, 10/28/2013 - 11:20 | 4097606 SheepDog-One
SheepDog-One's picture

Should have named himself 'Giant-Douchenozzle'

Mon, 10/28/2013 - 10:19 | 4097403 Stoploss
Stoploss's picture

What, about 15 moar S&P points?

Mon, 10/28/2013 - 10:20 | 4097406 replaceme
replaceme's picture

I'm hoping to buy the dip in real estate - our waitress this weekend thinks it's the perfect time to buy. 

Teasing, she seemed smarter than that.  Why buy when squatting is government sanctioned?

Mon, 10/28/2013 - 11:22 | 4097609 CrashisOptimistic
CrashisOptimistic's picture

I have not seen a "normal" house sale locally in years.

Used to be a young family would buy a house and move in based on schools, neighborhood, etc.   I have not seen a house sell around me that did not have a For Sale sign appear in front of it a few months later, or a For Rent sign.

In fact, a house up my street sold in late July.  The sign came down.  People moved out.  Zillow reports the sale.

Nobody moved in.  That house is vacant.  None of my neighbors can figure it out.

Mon, 10/28/2013 - 11:33 | 4097642 walküre
walküre's picture

Buyer is holding property as part of his "balanced" portfolio. Like good wines, good houses go up in value the older they get. You must live in a good neighborhood. I pity you.

Mon, 10/28/2013 - 10:21 | 4097408 ebworthen
ebworthen's picture

Where are those pundits who said higher mortgage rates wouldn't affect sales because the higher rates are "historically low"?

This is a historic depression spackled over with Food Stamps and an MSM/.gov BULLSHIT STORM.

Mon, 10/28/2013 - 11:40 | 4097677 walküre
walküre's picture

Don't forget the billions that the Fed pumps into the exchanges to keep stocks inflated artificially. Gives MSM and .gov the cover to keep the illusion up. Mainstreet is falling apart and Wall Street is upgrading nonstop.

Mon, 10/28/2013 - 10:34 | 4097412 RaceToTheBottom
RaceToTheBottom's picture

Maybe all those cash buyers ran out of debt?

Mon, 10/28/2013 - 10:23 | 4097413 Dapper Dan
Dapper Dan's picture

 

"4,594,000 Mortgages Going Unpaid in the United States." What Recovery? by MIKE WHITNEY

Lately, interest rates have been inching higher while prices have been rising. The combination of the two has put the kibosh on sales leading to a more generalized slowdown. But sluggish sales and higher rates don’t tell the whole story. For that, we need to take a peak under the hood and see what the cheerleaders in the media have been hiding from view. And what they’ve been hiding is nearly 5 million homeowners who’ve stopped paying their mortgages altogether. That’s no small matter. Here’s the story from DS News:

Lender Processing Services provided the media with a “first look” at the company’s mortgage performance statistics for the month of September….LPS counts a total of 3,266,000 mortgages nationwide that are 30 or more days past due but not yet in foreclosure. That tally represents 6.46 percent of all outstanding mortgages…..

Of the more than 3 million delinquent loans, LPS says 1,331,000 have missed at least three payments but haven’t started the foreclosure process.  Another 1,328,000 mortgages are currently winding their way through foreclosure pipelines, according to LPS’ data….

All-in-all, there are 4,594,000 mortgages going unpaid in the United States.” (“Number of U.S. Mortgages Going Unpaid = 4,594,000?, DS News) 

More at

http://www.counterpunch.org/2013/10/25/what-recovery/

Mon, 10/28/2013 - 11:32 | 4097640 More_sellers_th...
More_sellers_than_buyers's picture

Wow...Break that down and its almost 92000 per state (although it is obviously not all equal) but even so, thats a buttload of dwellings

Mon, 10/28/2013 - 13:05 | 4098095 disabledvet
disabledvet's picture

I would write the whole thing off. and I'm being totally serious when I say that. take Fannie and Fred out to conservatorship...starting to your "house that is now worth ten grand."

Mon, 10/28/2013 - 15:56 | 4098749 John Law Lives
John Law Lives's picture

Thanks for sharing that article.  Very alarming information.

Mon, 10/28/2013 - 10:23 | 4097414 Sudden Debt
Sudden Debt's picture

At least we can say... I USED TO BE WORSE!

BERNY?!?!

PLEASE COME BACK AND FIX THIS AGAIN!!! GET ON YOUR CHOPPER AND DO YOU THING!!

My silver already thanks you... SO MUCH!!

Mon, 10/28/2013 - 10:37 | 4097456 Ying-Yang
Ying-Yang's picture

LPS counts a total of 3,266,000 mortgages nationwide that are 30 or more days past due but not yet in foreclosure. That tally represents 6.46 percent of all outstanding mortgages…..

3.266 mil divided by 6.46% or in other words there are 50.557 mil mortgages

313.9 mil US population equals 1 mortgage for every 6.2 people.

Pondering the math...

Mon, 10/28/2013 - 11:01 | 4097540 Sudden Debt
Sudden Debt's picture

PERFECTLY NORMAL!!

It was summer and people had to go on vacation. And when you're on vacation you surely don't pay your morgage now do you?

Mon, 10/28/2013 - 10:25 | 4097421 hugovanderbubble
hugovanderbubble's picture

This is xtremly bullish, you know ...

Mon, 10/28/2013 - 10:26 | 4097422 hugovanderbubble
hugovanderbubble's picture

Hi there sudden Debt

Mon, 10/28/2013 - 10:27 | 4097426 Caviar Emptor
Caviar Emptor's picture

Let me explain why a collapse is bullish: home prices and rent equivalents count a lot for inflation figures!!! It would make the Fed look bad if a) homes go up and b) we make more pay

Mon, 10/28/2013 - 10:27 | 4097427 B2u
B2u's picture

The weather had something to do with the drop too...

Mon, 10/28/2013 - 10:29 | 4097435 GolfHatesMe
GolfHatesMe's picture

Go long Weather, it never disappoints

Mon, 10/28/2013 - 10:47 | 4097488 Headbanger
Headbanger's picture

You mean like no hurricanes at all this season keeping buyers on the beaches and their boats instead of house shopping??

Mon, 10/28/2013 - 10:28 | 4097429 laomei
laomei's picture

There's a whole lot left on the books that's being ignored, and there are fewer places worth buying anything in... with those few places existing in a bubble that locks actual people out of the market

Mon, 10/28/2013 - 10:27 | 4097431 John McCloy
John McCloy's picture

    Diminishing returns baby across all spectrums. The higher stockies go the more bennies are required to purchase at these artificial illusion prices. AND THAT is why more QE is coming..along with that pesky stubborn 10 year.

Mon, 10/28/2013 - 10:30 | 4097436 RaceToTheBottom
RaceToTheBottom's picture

Accounting is no longer needed.

Markets only go up.

Mon, 10/28/2013 - 10:33 | 4097443 vote_libertaria...
vote_libertarian_party's picture

aaaaaand stocks love the bad news.

Mon, 10/28/2013 - 10:34 | 4097447 Jimmy-the-G-man
Jimmy-the-G-man's picture

Ouch! Facial on Joe Lavs!!

He is the best reverse indicator out there. A broken clock is right more often than he is!! 

Mon, 10/28/2013 - 10:40 | 4097470 monopoly
monopoly's picture

This is beyond bizarre. The Tsunami is building.

Mon, 10/28/2013 - 11:43 | 4097688 monad
monad's picture

This is the soviet demoralization through taxation & red tape strategy. 

Mon, 10/28/2013 - 10:46 | 4097484 adr
adr's picture

Got my first bid on my house. $110k which would cost me $15k to get rid of the house.

Then the young couple found out it would cost $8000 and $155 a month for FHA mortgage insurance. Removed their bid.

Mon, 10/28/2013 - 11:06 | 4097554 surf0766
surf0766's picture

The house across from us was  puschased 9 years ago for $285,000. The owner listed it this March 2013 for $260,000. NO one even walked through. They took it off the market and painted and listed it at $245,000.  Still no traffic. It was marked down to $225,00 45 days ago and there was some traffic. There was an offer that fell through so the sellers being super smart increased the price to $229,900.. and the house sits again. How much money did these people really loose on this house. Sounds like an Obamacare story.

Mon, 10/28/2013 - 11:56 | 4097767 MachoMan
MachoMan's picture

You're supposed to lose money on a house from a depreciation/deterioration standpoint...  However, you don't really "lose" anything until it costs you more than renting the equivalent.

Mon, 10/28/2013 - 11:51 | 4097731 walküre
walküre's picture

There's nothing wrong with the price of your house. There is something very fundamentally wrong with an ARMY of buyers who are used to getting everything for FREE. Yes, folks this is a sideeffect of socialism. When the FSA comes on an open house tour, you know the market is completely fucked.

Another sign of the times is instant gratification. People want to have the house NOW and they want to own it NOW. Paying for the dwelling over 15 or 20 years? That's so not cool anymore. Guess what? Jobs were never safe. Unless you work for the government, your job is not safe. Never was.

Cost of lumber and other building materials is going up, up, up. Try and build a house with walls and a roof, plumbing, duckting, appliances and so on for $100,000 these days.

Mon, 10/28/2013 - 13:33 | 4098205 object_orient
object_orient's picture

There's a zero down, 100% financing guaranteed loan program from USDA. No mortgage insurance, closing costs can be added to the loan. Only catch is the house must be in a rural area. And from what I've read, the definition of "rural" is fairly liberal. Housing bubble 3.0, here we come.

Mon, 10/28/2013 - 10:57 | 4097520 Atticus Finch
Atticus Finch's picture

When my wife and I were buying house, the only thing that mattered was, "Can we afford it?" No one buying a home gives a shit about what is happening with the government. At the point of purchasing, most people have put so much time and effort into the process, they could care less what the hell is going on in Washington. To blame the housing decline on the shutdown is pure economist stooge fantasy.

Mon, 10/28/2013 - 11:00 | 4097532 1stepcloser
1stepcloser's picture

Let me know when the Trillion dollar coin goes on line. With my platnum coins and I can buy major cities.  

Mon, 10/28/2013 - 11:39 | 4097672 rlouis
rlouis's picture

I'm waiting for the time when an ordinary nickle is worth more than a paper dollar.

Mon, 10/28/2013 - 12:32 | 4097955 1stepcloser
1stepcloser's picture

currently its still under face value

 

1946-2013 Nickel
$0.05

$0.0449890
89.97%

Mon, 10/28/2013 - 11:00 | 4097534 Never One Roach
Never One Roach's picture

It's getting harder and harder to sucker people into buying a house and taking on massive debt in this economy where jobs are more insecure then ever and the 'layoff' rate is soaring even for formerly solid companies like Merck and Siemens. If Sears and jcp fold, we're going to see a flood of more jobless folks looking for a job.

It's sad.

Mon, 10/28/2013 - 11:21 | 4097607 RSloane
RSloane's picture

Oddly enough, the leader on Yahoo is "How To Buy A Home Without A Lot Of Cash". What possibly could go wrong?

Mon, 10/28/2013 - 11:19 | 4097598 SheepDog-One
SheepDog-One's picture

'GO AWAY! 'BATIN!'

Mon, 10/28/2013 - 11:40 | 4097674 Randoom Thought
Randoom Thought's picture

Well thank the powers that be that they got a whole new set of bagholders invested in own-to-rent real etstate and take the banks off the hook for all those foreclosures, with government subsidies.

Mon, 10/28/2013 - 11:47 | 4097711 STG5IVE
STG5IVE's picture

And the colored stocks go

Doo, Da Doo, Da Doo

Do Da Daw

Doo, Da Doo, Da Doo

Da Daw Doooooooooooooooooo

Mon, 10/28/2013 - 13:50 | 4098290 orangegeek
orangegeek's picture

Yes, but how's the tent market? And how's the cardboard box market?  The world wants to know.

Mon, 10/28/2013 - 14:26 | 4098406 Serfs_Up
Serfs_Up's picture

Typical Real Estate Agent: "It's always GREAT time to buy/sell!" OR

"I'm in the Presidents Elite...I've SOLD $1 Beeelion worth of Real Estate...blah blah blah.."

Mon, 10/28/2013 - 14:29 | 4098425 Big Ben
Big Ben's picture

Help us, Yellen, help us! If the Fed doesn't expand it's MBS purchases to $160 billion/month ($200B would be better), we won't be able to use our homes as ATMs anymore and the economy will collapse.

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