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Schadenfreude: Economists "Stunned" By Housing Fade

Tyler Durden's picture




 

Submitted by Lance Roberts of STA Wealth Management,

 

 

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Thu, 04/24/2014 - 15:09 | 4691982 SmilinJoeFizzion
SmilinJoeFizzion's picture

Where I live the inventory is very lite- Someone is buying, or should I say, bought 

Thu, 04/24/2014 - 15:16 | 4692013 Boris Alatovkrap
Boris Alatovkrap's picture

Stupid large ego economist fail to learn causality... Price of goods (house, gold, food, fuel) is INDICATOR of economic reality, not is DRIVER of economic future. Now, let us to break some Keynesian face and stimulate local economy.

Thu, 04/24/2014 - 15:23 | 4692056 Unknown Poster
Unknown Poster's picture

Is that Krugman,s broken fce theory?

Thu, 04/24/2014 - 16:26 | 4692327 Groundhog Day
Groundhog Day's picture

So if we all got together and beat the living daylights out of all economists (like Krugman), bankers(too many to name), politicians (soo many worldwide) crooked ceo's and cfo's(hiding behind bullshit GAAP/NoN GAAP trickery) then we would have a true economic recovery.   look at all the work that would be created.....

1)companies that make bandages would see growth

2)companies that make self defense gear and equipment would see growth

3)medical doctors, surgeons and plastic surgeons would get work

4)lawyers would get work

5)hospitals would get even more work

6)Clothing industry might get some new business

7)nurses would get work

8) all the beat up scums of the earth would be out of commission for a while so unemployment would go down for real as new people would have to replace the beaten...which means HR dept's would be busy.....DAMN THE LIST GOES ON AND ON

I THINK THIS KEYNESIAN THING IS GROWING ON ME

KRUGMN YOU POS STAY INDOORS

Thu, 04/24/2014 - 15:27 | 4692073 813kml
813kml's picture

I'm guessing that you are in the DC area, and that the inventory you are referring to is politicians.

Thu, 04/24/2014 - 16:07 | 4692263 Seer
Seer's picture

"Where I live the inventory is very lite"

Did you catch the part where banks are sitting on a lot of yet-to-hit-the-market-repos (or properties that would otherwise be in the repo process if it weren't for the fact that listing too many as repos tends to make the books look bad)?  That and people who are just plain underwater and who would otherwise be wanting to sell?

Thu, 04/24/2014 - 15:10 | 4691984 FL_Conservative
FL_Conservative's picture

What is this "market" for housing that you speak of?  I haven't seen one for some time now.   Same with the stock "market".

Thu, 04/24/2014 - 15:24 | 4692063 813kml
813kml's picture

Economists "stunned" to find that water is wet.

Thu, 04/24/2014 - 16:28 | 4692344 Groundhog Day
Groundhog Day's picture

Maybe some ivy league university should get some free grants from the taxpayer's, i mean government to do a stdy to confirm that

Thu, 04/24/2014 - 15:50 | 4692163 CrashisOptimistic
CrashisOptimistic's picture

There is NO more filled with bullshit industry than real estate.

Up the street I saw a house put up for sale last summer.  It sold last day of August.  People moved out.

No one moved in.  I waited to see construction people preparing it for flipping.  They never showed up.  I waited to see For Rent signs in front of it.  Never showed up.

Got nosey and started looking around the back as I drove past it.  There's an RV and a boat back there, been there for years, owned by the previous owner.

Checked the county records.  The place sold for 40,000 under list (and that list price was competitive for this area).  In addition to selling under list, the boat and RV was thrown in (because, you see, this doesn't cut the price (and real estate agent commissions).

The place is still empty.  The owners have the grass mowed and shut off water in the winter months so the pipes didn't freeze.  I guess they hope to sell at a profit some day, but as of now they are paying taxes for something no one lives in.  It's been over 6 months.  Very puzzling.

Oh, clarification, I don't think the owners who sold in Aug had a mortgage.  Very long term owners.

Thu, 04/24/2014 - 16:14 | 4692291 Seer
Seer's picture

And after nearlly three years my neighbor's nearly 300 acres (with home) still is for sale.  Maybe some day I can buy it...

Way down the county road one place I saw evacuated, the, apparently, renters were pulling everyhing down (buch of animals and stuff) and burning stuff.  There sits, after MANY months, a couple of boats, sans trailers, and, I'm pretty sure, a ton of crap in the outbuildings.  Upstairs windows had been boarded up a long time before the renters had even vacated: I think they call this "deferred maintenance," something that after all the years since I'd first heard this term still makes me chuckle.  The property is now listed as bank-owned.  No obvious signs to clean up or otherwise attempt to sell this place.

A fair number of for-sale around, but sales don't seem to be happening.

Thu, 04/24/2014 - 16:32 | 4692360 Groundhog Day
Groundhog Day's picture

But every RE agent i speak to (because i am in the market for an upgrade) tells me their is no inventory, yet i see empty bank owned properties everywhere

Thu, 04/24/2014 - 16:38 | 4692387 Seer
Seer's picture

I suppose that "inventory" is dependent on type/location.  For/to you it might be that there isn't much of a selection, yet for others perhaps?

For sure, though, there's some sort of disconnect going on, at the very least it sure all ain't even in the ballpark of what it was a while back, AND, it seems like a good bet it never will be again.

Thu, 04/24/2014 - 15:10 | 4691985 ebworthen
ebworthen's picture

You mean the 16+ year FED driven see-saw housing bubble(s) is going to pop again?

You mean to tell me that declining income and employment affects the ability to pay a mortgage?

Quick, someone tell the FED they do nothing but inflate prices and crush employment!

Wait...

Thu, 04/24/2014 - 15:19 | 4692042 Winston Churchill
Winston Churchill's picture

Go back a little further.
I remember the S + L bust.

Thu, 04/24/2014 - 15:25 | 4692068 813kml
813kml's picture

I realize the 'L' stands for loan, but can't remember what the 'S' means.

Thu, 04/24/2014 - 15:51 | 4692196 CrashisOptimistic
CrashisOptimistic's picture

 

S for Shit.

Thu, 04/24/2014 - 17:50 | 4692680 Ying-Yang
Ying-Yang's picture

S+L

I believe it was the Savings and Loan bust.

When the RTC was created to bail out the failing S&Ls

The savings and loan crisis of the 1980s and 1990s (commonly dubbed the S&L crisis) was the failure of 1,043 out of the 3,234 savings and loan associations in the United States from 1986 to 1995: FSLIC closed or otherwise resolved 296 institutions from 1986-1989 and the RTC closed or otherwise resolved 747 institutions from 1989-1995.

The US almost went tits up over this.

Thu, 04/24/2014 - 20:10 | 4693228 VegasBob
VegasBob's picture

And Bush the Smarter even put 3,000 bankers in jail for the S&L crisis in 89-91.

How many have gone to jail under the Obumbler?

Thu, 04/24/2014 - 16:40 | 4692394 Seer
Seer's picture

"Sucker" (was "Subprime" in the lexicon back then?)

Thu, 04/24/2014 - 16:00 | 4692236 ebworthen
ebworthen's picture

True.

The 1933 Banking Act of Glass-Steagall was repealed in 1999, but the shenanigans started before that.

Those who remembered the mistakes of the Great Depression were out of power/influence by the late 1960's.

Thu, 04/24/2014 - 15:10 | 4691986 Ignatius
Ignatius's picture

I live in the Pacific Northwest.

If weather were really the issue they'd still only be dragging logs down skid road in Seattle and Portland.

Thu, 04/24/2014 - 15:18 | 4692033 Boris Alatovkrap
Boris Alatovkrap's picture

You are forget also hooker importance of Seattle economy.

Thu, 04/24/2014 - 15:40 | 4692110 Ignatius
Ignatius's picture

My informal survey suggests it's a universal geographic phenomenom.

Michael Parenti was visiting Russia back when it was the Soviet Union.  A state guide informed him proudly that there was no prostitution in the Soviet Union.  "Oh, really" he said "that's interesting because they're doing a bang-up business down in this hotel's lobby."

Thu, 04/24/2014 - 15:10 | 4691987 motorollin
motorollin's picture

Blackrock ended their home purchasing program. Anyone that knew that shouldn't be stunned.

Thu, 04/24/2014 - 15:11 | 4691992 _SILENCER
_SILENCER's picture

Buying a house is rayciss.

Thu, 04/24/2014 - 15:12 | 4691997 Smegley Wanxalot
Smegley Wanxalot's picture

And these are the same guys 100% of whom say "there is no stopping the economic growth now! No way no how!!  Whoyagonna believe?  Me or your lying eyes?"

Thu, 04/24/2014 - 16:42 | 4692401 Seer
Seer's picture

Spoilsport!  Pretending can be so much fun! </sarc>

Thu, 04/24/2014 - 15:16 | 4692018 NOTW777
NOTW777's picture

someone tell seeking alpo - they are extoling the boom in housing today

Thu, 04/24/2014 - 15:17 | 4692023 Yen Cross
Yen Cross's picture

    Blame the slowdown on an expected series of heatwaves during June-Sept. across North America. </sarc>

Thu, 04/24/2014 - 15:18 | 4692035 dashingdwl
dashingdwl's picture

Another factor and a HUGE Problem (IMO) is the massive amount of student loan debt accumulated by the younger generation.  Huge problems ahead for the badly needed "fresh entrants" and growth in "household formation". Those folks will not be consuming discretionary items to any large degree any time over the next twenty years.  $1 trillion of non-dischargeable student loan debt and rising... 

Thu, 04/24/2014 - 15:18 | 4692036 Dr. Richard Head
Dr. Richard Head's picture

Someone please explain this to me...

My neighbor is renting the 3,500 sq/ft home next door to me.  The previous owner, who moved out to Utah, has been renting this house in Ohio out for years and decided to stop paying on it.  The rentor followed suit once he realized it was going to go into foreclosure.  Prior to the auction the rentor contacted the bank holding the lien wanting to offer to buy the house and they refused to talk to him.  THe house appraised for $190K.  At auction, the rentor bid on the house, but every bid was upped by the bank currently holding the lien.  He stopped bidding at $235 and bank raise it to $240.  Again, the rentor contacted the bank to offer to buy the house for $240.  The said he would have to move out before he could even bid on the house again.  The house was auctioned off in early January and yet, there he still sits in the home with his family and for 2.5 years now he has not paid anyone anything. 

Why the funk would the bank not take any offers and outbid him for the house?  I'm so confused.  

Thu, 04/24/2014 - 15:21 | 4692047 dashingdwl
dashingdwl's picture

Because the bank can hold the loan, mark it at par, and not have to worry about it again for years...

If they sell it below par, they have to mark the loss.

Fri, 04/25/2014 - 02:07 | 4694040 Boris Alatovkrap
Boris Alatovkrap's picture

Maybe Dr. Paul Krugman is financial advisor to bank board of director? Maybe Mr. Nancy Pelosi is major shareholder? WTF?

Thu, 04/24/2014 - 15:30 | 4692089 Winston Churchill
Winston Churchill's picture

Because its levered a minimum ten times in various RMBS
trusts, and the bank is on the hook for paying all ten income streams.Foreclosure stops that liability, a sale doesn't.
A sale means all ten trusts need paying off at once.
This is the major reason reo is staying off the market,
the bank charges the trusts for upkeep, but doesn't want to sell to not recognize the true loss.
So the house is really worth $2m plus to the bank.
When the FedRes has bought out the entire RMBS market, all those houses will flood the market, because the FedRes is never going to demand an accounting from their shareholders.

Thu, 04/24/2014 - 15:48 | 4692186 TN Jed
TN Jed's picture

Great explanation thanks.  Dastardly.  That is a lot of debt to swallow.  I mean credit.  I mean ahh I don't know what it is anymore.  I know I couldn't live in a place too long under those circumstances.  Home is sanctuary and at some point perpetually living on eggshells would take its toll on me.  I'm sure they are fully aware of the psychological effects.

Thu, 04/24/2014 - 15:55 | 4692211 Dr. Richard Head
Dr. Richard Head's picture

Yeah, he has a new place all lined up and is about to close on it, so he really doesn't seem to care one way or the other. 

I also appreciate WC's reasoning behing the bank's actions.  I completely forgot about rehypothication of RMBS....So much to take in any more as it relates to this Fraudconomy.

Thu, 04/24/2014 - 16:41 | 4692400 Groundhog Day
Groundhog Day's picture

My neighbor made the crucial mistake of upgrading his house to sell it and move into a bigger house.  During the downturn he thought he could pick up the 800k house for 650k and sell his for 500k.  He buys the 650k and can't get anything close to his 500k number and decides to wait.....2 years later he had no choice but to rent out his original house just to ease the pain of the 2 notes.  Some people just don't get it

Thu, 04/24/2014 - 15:31 | 4692097 Singelguy
Singelguy's picture

It is very simple. The bank probably has the mortgage on its books at par value which is no where near the actual market value. If the bank sells the house, it will no longer be able to mark the mortgage to some fantasy number, and will be forced to realize the actual loss. Multiply your neighbor's house by several million and it would be enough to sink a few of the big banks so they keep the fantasy going hoping to earn enough profit in other areas of the bank before the proverbial shit hits the fan.

Thu, 04/24/2014 - 15:49 | 4692189 hangemhigh77
hangemhigh77's picture

Probably because they hold a 500k note on it and if they sell for less they take a hit. Then they don't get bonuses. Plus eventually the government will bail the house out at 500k. And he's living there cutting the lawn. Perfect in this criminal convoluted bankster world.

Thu, 04/24/2014 - 15:52 | 4692202 Dr. Richard Head
Dr. Richard Head's picture

No lawn cutting or tending to any of the outside of the house.  I wouldn't either in his shoes.

Thu, 04/24/2014 - 16:42 | 4692393 besnook
besnook's picture

the bank is flipping the house to itself. interestingly, the market is bifurcated between the foreclosure market and the traditional market. it is no longer true that foreclosed homes affect the local real estate market because the foreclosure market is virtually closed to the traditional home buyer. it is strictly an investment market. two things are happening. as the fed clears the books of the banks by buying mortgage backed securities that are worth zero but are held on the banks' books for fantasy value the banks are able to clear their fantasy book with a more reality based book because the fed is paying 100% on the dollar. on the one hand i see a tight group of investors with inside ties to the banks that are either representing other peoples' money or their own. the banks seem have taken two strategies. they either unload the properties for whatever they can get because it has become "found money" or, in a few cases, the banks have recognized the unlocked value of these homes and are selling them on the retail market for a lot more money, like a merchant bank.

the only other reason i can think of is the guy is talking to the wrong people in the bank. one hand may not know what the other hand is doing. tell him to ask for the real estate owned(reo) guy next time he is in the bank or find the local fha office if the loan was .gov gauranteed

Thu, 04/24/2014 - 20:13 | 4693237 VegasBob
VegasBob's picture

Bankers are good at deception, theft and fraud.  Outside those areas, they are not so smart.

Thu, 04/24/2014 - 15:22 | 4692051 over45
over45's picture

I sold a house 25 years ago for 147k.  It's tax assessment now is 315k, but it's on the market for $139.5k - less than what I sold it for 25 years ago.   Taxes have more than tripled.  What goes up - must come down.  This is a foreclosure but it drags down pricing on other properties by taking buyers out of the market.  Areas with good, sustainable jobs are doing o.k., as are desireable retirement areas... but otherwise watchout below.

Thu, 04/24/2014 - 16:54 | 4692467 kchrisc
kchrisc's picture

Interesting, the rent to the local thieves has tripled while the inflation adjusted price has declined by more than twice making the inflation adjusted rent to the local thieves 6 times or more than 25 years ago.

 

"...it's good to be the king!"

Thu, 04/24/2014 - 15:24 | 4692061 Seer
Seer's picture

Suppliers of unicorn dust are to blame!

Thu, 04/24/2014 - 15:28 | 4692075 NEOSERF
NEOSERF's picture

Housing formation declines are likely tied to what is being seen in Japan re; sex, marriage, even dating...can't be bothered.  The drivers of this is the virtual world brought to you and I by the internet.  There is ALWAYS something more interesting on your phone than the person sitting next to you...

Thu, 04/24/2014 - 15:29 | 4692083 starman
starman's picture

What is a economist???? Modern day palm reader?

Thu, 04/24/2014 - 15:30 | 4692091 813kml
813kml's picture

An economist could only hope to be that accurate.

Thu, 04/24/2014 - 16:48 | 4692437 Seer
Seer's picture

And they're afraid of sweaty palms...

Thu, 04/24/2014 - 15:31 | 4692095 DOGGONE
DOGGONE's picture

Just look at these
http://www.nytimes.com/imagepages/2006/08/26/weekinreview/27leon_graph2....
http://www.showrealhist.com/RHandRD.html
and say where inflation-adjusted home prices SHOULD BE.

Thu, 04/24/2014 - 15:35 | 4692112 Charles Nelson ...
Charles Nelson Reilly's picture

I'm pretty stoked we sold our home last summer, took the useless fiat from the sale, added to our gold postion, and are renting now.

 

Thu, 04/24/2014 - 15:43 | 4692164 Notsobadwlad
Notsobadwlad's picture

Yeah, right ... because you are using all of the money you are making on your gold investment (the dividends and interest the gold investment is paying) to throw that money permanently away to the landlord.

JMHO ... but you are an idiot. 

Thu, 04/24/2014 - 16:01 | 4692243 Charles Nelson ...
Charles Nelson Reilly's picture

what the fuck are you talking about dipshit?  I took (some) money from the sale of our home added to our position in physical gold that will pay dividends years from now.  I have no intention of selling it anytime soon. We have cash to put towards a down payment when we want to purchase a new home.  Is it really that necessary to rush out and buy and new home the second you sell yours?  I don't think so and our reserach into different communities we want to live in will pay dividends well beyond any financial reward.

as a side note to this dipshits response, I'd like to share my experiences.  For about 8 months I've talked with dozens of people, Realtors, builders, architets, etc. and we've come to the conclusion we will most likely build our home.  We've identified a plot of land in a rural community of liked minded people.  We will be close to organic farmers, have plenty of land to grow our own food and most importantly custom build an energy efficient home outfitted with geothermal heating/cooling, solar energy in hopes of becoming a full Net-Zero house.

so IMO you can fuck off.

Thu, 04/24/2014 - 16:35 | 4692371 The_Dude
The_Dude's picture

Charles....look into a modular home ....likely one of the easiest ways to get constructed in a remote spot, also tend to be built with higher R values...heating system options may be a hurdle.

Thu, 04/24/2014 - 16:42 | 4692402 Winston Churchill
Winston Churchill's picture

Watch yourself on modular homes.Be careful.
They were the first to go to the wall last time, taking
customer money with them.

Thu, 04/24/2014 - 16:51 | 4692454 Seer
Seer's picture

Charles, it's a long road, believe me on this point.  Best to get getting on as soon as you can.  Timing worked out really good for me as I caught a good "bottom" in the RE market (Ag land) and did so with a new on-the-same-page partner in tow.  Time doesn't stop... and, the music could stop at any time.

Thu, 04/24/2014 - 21:47 | 4693523 Aussiekiwi
Aussiekiwi's picture

I know of someone in Perth who sold his house at the top of the Bubble in Perth, his house had doubled in a few years so he knew it was a bubble, he then turned around and put it all into Gold, he is sitting on a huge proffit on the house which has dropped in value and a nice profit on the Gold....just got to use some common sense and ignore what MSM is saying.

Thu, 04/24/2014 - 15:41 | 4692152 Notsobadwlad
Notsobadwlad's picture

Why? Because prices are higher than people can afford. My guess is that the economist who suck on the tit of the banks and government are disconnected with the real world that they have helped to destroy.

Thu, 04/24/2014 - 15:43 | 4692160 yellowsub
yellowsub's picture

The next wave of buyers carry too much student debt to buy.

Thu, 04/24/2014 - 15:47 | 4692179 Max Cynical
Max Cynical's picture

"Incremental increases in interest rates have a direct effect on a buyer's "willingness" and "ability" to make certain monthly payments"

I'd like to add...Massive increases in costs for healthcare, food and energy will have a direct effect on a buyer's "willingness" and "ability" to make certain monthly payments.

Thu, 04/24/2014 - 16:44 | 4692411 Winston Churchill
Winston Churchill's picture

Purely coincidental that the market stopped around the
launch of Obozocare.

Thu, 04/24/2014 - 15:56 | 4692216 the not so migh...
the not so mighty maximiza's picture

once i secure my part time job i will buy a house

Thu, 04/24/2014 - 16:00 | 4692235 orangegeek
orangegeek's picture

This monthly housing index reflect stock prices of the largest homebuilders

 

http://bullandbearmash.com/chart/monthly-philly-housing-index-reverses-t...

 

The 2006 housing crash was the start which has NEVER recovered.  US stock markets are ridiculously diverged from economic realiity -  in other words, this index is much higher than the housing market itself.

 

 

Thu, 04/24/2014 - 16:34 | 4692368 SMC
SMC's picture

Just "stunned"? Too bad the phasor wasn't set to vaporize. ROFL.

Thu, 04/24/2014 - 16:38 | 4692384 kchrisc
kchrisc's picture

To Hades and beyond!

Thu, 04/24/2014 - 16:55 | 4692470 Spungo
Spungo's picture

Economists shocked to find that minimum wage workers can't buy houses.

Thu, 04/24/2014 - 17:03 | 4692493 Cthonic
Cthonic's picture

Economists shocked to find that minimum wage workers can't buy (decent) houses where they can find minimum wage jobs.

http://www.zillow.com/homedetails/813-Westwood-Ave-Dayton-OH-45402/35105...

  • Heating Type:Unknown -> sterno and cardboard

Wait nevermind, $10k in back taxes...

Thu, 04/24/2014 - 17:10 | 4692528 Seer
Seer's picture

I recognize the style of the house!  It's like a "salt box," I htink it's a "crack box."

Thu, 04/24/2014 - 17:38 | 4692652 Cthonic
Cthonic's picture

Minimal traditionalist style built at the heights of NCR, Delco, and Dayton-Wright.  A real piece of Americana, available for adverse possession.  Pass the pipe.

Thu, 04/24/2014 - 17:01 | 4692488 over45
over45's picture

The real estate industry can only exist in it's present form if sellers have enough equity to pay commissions, or banks can pass off losses to others to sell below securitized valuations.   Everything is getting squeezed and when rates rise -- the jig is up.  A house is simply a box of enclosed air that loses value over time. 

Thu, 04/24/2014 - 17:44 | 4692669 RaceToTheBottom
RaceToTheBottom's picture

Undebasement of accounting rules sorts this all out in 2 years max.

Thu, 04/24/2014 - 18:11 | 4692751 JR
JR's picture

As with all markets, changes in the housing market are driven by the "supply/demand" equation.  – Lance Roberts

As with all markets these days, they are being driven by the Fed; it is the Fed that has deliberately withdrawn the gas from the housing market for the benefit of the investment bankers. And it is my opinion that the American people are going to find a new driver – and fire the Fed.

David Stockman and other economic Cassandras, IMO, are trotted out regularly by the Fed to make the case to America’s beleaguered middle class that things are going to get bad and you might as well get used to it…

…that the Fed has commandeered your equity and your home value to reboot Wall Street and friends and you might as well get used to it

…that only TBTF bankers are entitled to interest -- on money they create out of nothing – and John Q Public is not entitled to interest on his loaned stored labor, i.e., savings, and he might as well get used to it

…that the "giant sucking sound" of globalization is here to stay and America’s propertied and sovereign-loving middle class might as well get used to it”

…that permanent cultural change is here and America’s displaced middle class family unit and way of life might as well just get used to it…

In short, Stockman et al., IMO, are not on the side of America’s middle class. They are espousing the philosophy of the enemy, warming the frog to its demise.

Why do I say this? Housing is the middle-class mainstay ingredient of this economy. Millions of people use their house as their economy; thousands of American industries depend upon this middle class mainstay for their raison d’etre. The housing factor, with all the industries that rest upon it, in the end is going to retake its dominance over the American economy. It’s imminent.  Stockman et al., are overplaying the demise of housing.

Thu, 04/24/2014 - 18:40 | 4692862 Youri Carma
Youri Carma's picture
With this stalling housing market that it wouldn’t surprise me if the use the funny money to buy up whole streets and trade these among themselves in so-called round-trip trades to pretend there still is an housing market and to keep up housing prices. Or maybe that already happened in a way and we are going to see round-trip trade II. A Stunning 80% Of All New York, Florida And Nevada Condo Purchases Are “All Cash”

U.S. mortgage-application volume falls 3.3% as interest rates broadly increased http://www.marketwatch.com/story/us-mortgage-application-volume-falls-33-mba-2014-04-23 The average rate on 30-year, fixed-rate mortgages with conforming loans climbed to 4.49% from 4.47% the previous week.
Rates on 30-year, fixed-rate mortgages with jumbo-loan balances grew to 4.41% from 4.39%.
The average rate for 30-year, fixed-rate mortgages backed by the Federal Housing Administration increased to 4.2% from 4.14% the prior week.
The average rate for 15-year, fixed-rate mortgages climbed to 3.55% from 3.54% the prior week.
The 5/1 ARM average ticked up to 3.16% from 3.15%.

Thu, 04/24/2014 - 21:30 | 4693480 Magooo
Magooo's picture

Then you have the donkeys who actually believed this nonsense about a housing recovery who went long and are now about to be burned badly.

 

I don't know how many times I warned people that the 'recovery' was about 45 billion dollars at zirp passed to firms like blackrock to buy up foreclosed properties --- that this was UNsustainable --- particularly when you have 50M on food stamps, wages in decline and students saddled with massive debts.

 

PRAY TELL HOW DO YOU GET A RECOVERY WHEN NOBODY HAS ANY MUNNY TO BUY HOUSES???????

 

But the stupid donkeys charged in gleefully believing they had scored huge deals ---  get ready for negative equity my friends.  

 

And ya - I told you so.

Thu, 04/24/2014 - 21:42 | 4693510 Aussiekiwi
Aussiekiwi's picture

Your problem Magooo is that you pointed out the common sense obvious, economists are not interested in that, if it was just a matter of common sense, nobody would need economists and they would be flipping burgers somewhere.

Thu, 04/24/2014 - 22:25 | 4693641 WildBlue
WildBlue's picture

One unmentioned contributor to slow US home sales is the increased cost of healthcare under Obamacare.  In addition to massively higher deductibles and other expanded financial burdens on insureds, some monthly health insurance premium increases on families equate to a mortgage payment.  Further, uncertainty for those still covered under employer plans no doubt has many of those prospective homebuyers on the sidelines until they have clarity as to the impact of health insurance costs on their finances, which impact has been delayed until after the November elections. And the worst impacts of Obamacare are yet to come.

 

Fri, 04/25/2014 - 12:00 | 4695506 honestann
honestann's picture

A couple observations.  The predators who have massively manipulated the economy over the past many years (and decades) have made the economy massively less efficient.

Which leaves less money per individual for any purchase, house included.  Furthermore, effective tax rates are higher, which causes the same result (property taxes and healthcare [taxes] included).

Furthermore, the opportunities for average people with average skills has gotten so bad now, the notion of multi-generations of family living in one home is now increasing, because this does greatly reduce living costs.

Unless the predators are overthrown, in two or three decades, almost all individuals will be destitute.  Actually, most individuals today ARE destitute on paper, and only living a barely tolerable life by getting deeper and deeper into debt.  But debts are so high now, the whole debt scam cannot be pushed much further.  This problem exists as much for governments as individuals, as Japan is a blatant example.

The predators and their fiat, fake, fraud, fiction, fantasy, fractional-reserve scam have destroyed the world economy.  That's all there is to this and many other economic issues.

Sun, 04/27/2014 - 17:40 | 4701932 Zeta Reticuli
Zeta Reticuli's picture

Let's see. Household income is down, household debt is up, unemployment is up (despite the gov't lies), first time buyers are living with their parents because they can't even afford to rent, mortgage applications are at a 20 year low. I wonder why the market is down.

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