Despite YoY Existing Home Sales Dropping 7th Month In A Row, Realtors Declare Sales Decline Is Over

Tyler Durden's picture

Existing Home Sales beat expectations by the most in 11 months at 4.89 million annualized. This headline print is being greeted with exuberance as NAR declares the sale decline is over. However, this is the 7th month in a row of year-over-year declines and the gains are anything but broad-based with the Midwest and South being the biggest driver as the West stagnates. The percent share of first-time buyers continued to underperform, representing less than one- third of all buyers at 27% in May, down from 29% in April (hovering near record lows). Not exactly the organic, non-flip-dat-house wealth building transmission mechanism the Fed is hoping to build the US 'recovery' on.

Big beat..


But this is the 7th month in a row of YoY declines...

As NAR notes,

Many potential buyers were left on the sidelines beginning last summer as affordability declined amidst rising home prices and interest rates,” he said.


The temporary pause in rising interest rates and more homes for sale is good news – especially for first-time home buyers – who likely have a better chance in upcoming months to make a competitive offer that’s in return accepted by the seller.”

Charts: Bloomberg

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Winston of Oceania's picture

People need full time employment to afford a house, not some sub 30 hr gig that evades obumblecare.

Top Gear's picture

Yet free trade requires the despotic slavedrivers in East Asia to command the job market.

Dr. Engali's picture

Recovery is just around the corner bitchez! There has never been a better time to kick a realtor in the nuts.

Zirpedge's picture

ZH maintains course with Titty's and threats of violence getting the upvotes.

NoDebt's picture

Where's the post about titties?  I need to go up-vote it.

I already upvoted Doc's comment.

Dr. Engali's picture

You better be careful, that stick up your ass might tear something when you bend over. By the way, you should use the word 'titties' when describing a pair of succulent breasts, 'titty's' is the possessive form of the word.

kchrisc's picture

A "titty's" possessive in hand is better than titties in the bush.

Colonel Klink's picture

There has never been a better time to get shafted, buy now!


IronShield's picture

Until home prices decline at least 90% peak-to-trough we will NOT have a stable or realistic market.

Zirpedge's picture

I gave up worrying about what crazy people thought a long time ago. If you came here to discern "realism", I'm sorry. These charts confirm one thing, that a great buying opportunity is underway in the south and midwest. The so called rust belt is getting dusted off and American manufacturing is coming back in a big way. 

i_call_you_my_base's picture

Whatever. The last few years of increases were the result of cash buyers and the Fed. As the Fed draws down MBS purchases and the cash buyers / investors realize that they can't get renters, prices will decline. Wages do not support the prices. Unless you think that the Fed's efforts and cash buyers (flippers / landlords) had no impact on prices? The other thing is that once people realize the RE market has topped out, they will scramble to sell. All of those people waiting for the market to go up will get spooked.

Zirpedge's picture

The old rush to the exit myth about housing. Anyone else want to pile on a logical fallacy? Look to the next article on "Who is propping up the housing recovery"...seems to me the logical conclusion is that the smart money is ahead fo the curve again leaving the deranged fringe ZH'er to reverse engineer reasons why they missed the boat again. 

i_call_you_my_base's picture

Ahead of the curve how? By buying high-end housing? Too bad the vast majority of Americans can't afford it. And look at the percentage of houses in that bracket. It doesn't align with the population and earnings. All that shows is that rich people are getting richer as a result of QE and are upgrading.

Zirpedge's picture

Right, the "BANKSTERS" who have benefitted from QE are buying $1M homes all over the south and midwest. It's either a conspiracy or the manufacturing sector is improving and talented management personnel with familes are moving back in. I'm going with educated and skilled labor at that price level. 

Blankenstein's picture


"Who is propping up the housing recovery"


You ask this and ZIRP is part of your screen name?  Wow

Blankenstein's picture

Complete NAR/bank/greater fool trying to unload his overpriced hut propaganda.  You obviously have no knowledge of the midwest, because most real estate here is grossly overpriced.  But go ahead zirptard, because it's a good time to buy.

IronShield's picture

Until there is a complete rejection of the FIRE 'industry' there will be NO recovery in real estate or anything else linked to this paper-pushing non-productive group.  It is an ongoing process with many more adjustments to come.  If you are in that 'industry' you had better start thinking of how you can obtain productive skills because it's O-V-E-R; and good riddance.

daveO's picture

Right, the last few years have been a ball bouncing off of a step, on it's way downstairs. Just a dead cat bounce until 2/3rd's of sales are all cash.

LawsofPhysics's picture

Let me be clear; "The rent is too damn high!"


Wages matter motherfuckers.

NoDebt's picture

Then you should be overjoyed at hearing how much US Manufacturing beat expectations this morning.  Won't be long and we'll be back to having millions of good-paying union jobs flooding the housing market with their newly-boosted income.

It's all been 'fixed'.  Kinda like Europe.  No.... probably more like how you get your pet dog 'fixed'.

Top Gear's picture

Wage earners are profit sucking parasites who deserve all the contempt heaped upon them by their capitalist bosses.


Let them eat Nutraloaf.

ENTP's picture

Thank goodness consumers have finally gotten over the "there's too many choices," which was their excuse for last months slow down.   

Cognitive Dissonance's picture

My son was a recent first time buyer, just closing at the end of May.

The 'fees' charged by all parties involved was criminal to say the least and I brought it to his attention well before he closed. But his argument for moving forward was hard to refute. Even with the high property taxes, expensive fees and higher than normal interest rate (cus he is a first time buyer with no credit history of this type even though he has good credit) his combined mortgage/insures/taxes/PMI payment is still two thirds what he was paying in rent.

ParkAveFlasher's picture

What market did he buy and rent in, if I may ask, CD?

-.-'s picture

Could not have been in Austin, Texas

Cognitive Dissonance's picture

In PA just north of the Mason-Dixon line. The bankrupt PA capital is a couple days away by horse carriage.

ParkAveFlasher's picture

Nice, and good luck to him.  On that note, how long until house builders have to subcontract out to the Amish? 

Yes We Can. But Lets Not.'s picture

No way Cog - he is not correctly factoring in the cost of furnishing, updating and especially *maintaining* that home (plus all the shit he'll have to complete in order to one-day get out of the house - it is so much easier to get into a house than out of a house).  In five years, your first-time-home-owner son will understand this point well.  Plus, he should assume 6% off the top for eventual sale transaction cost.

Cognitive Dissonance's picture

I tend to agree. But when you live from month to month cash flow is King. Besides his wife demanded a house or extreme prejudice would befall my son. My son wisely decided that when momma is happy, everyone is happy.  :)

<Regarding maintenance, my son called me yesterday regarding electrical issues and if there is any recourse against the professional home inspector that signaled the all clear when it clearly was not. Sigh! Let the buyer beware. I will be visiting him this Sat with tool box, 12-3 cable and circuit breakers in hand.>

Jason T's picture

Laboring on your own account is like printing your own money.  Tis a good lesson for your son. 

Cognitive Dissonance's picture

The best investment I can make in myself is a good set of tools. It was a lesson I learned young and it has paid dividends all my life.

Mrs. Cog and I took the occasion of my son buying his first home to spend a decent chunk of money on good (not best) tools for him. I'm actually jealous and used that to purchase a few more for me. :)

They will be presented to him when we visit Sat. Even got the Mrs. Son a small bag of tools for her in order to empower her. When the wife has her own hammer, tape measure, screw drivers etc it is amazing what they can do if they try. Very empowering. No asking hubby to tighten that knob or hang that picture. The benefits far outweigh the detriments.

Dr. Engali's picture

While true there are a lot of upkeep costs that need to be factored in, but the bottom line for me is that I would much rather 'own' be at the mercy of some landlord. 

Cognitive Dissonance's picture

The property taxes in PA are astonishingly high. Just amazing. Archaic taxing authorities with a million separate school districts. Essentially his property taxes are 5% of the purchase price yearly.

I told him that anything you must pay a 5% 'fee' per year to in order to 'own' is not yours. His response is that it is where his and her job is. Just staggering.

Down here in Southwestern VA the property tax is one half of 1% and we are complaining.

Yes We Can. But Lets Not.'s picture

Please update us after the first huge rain falls on your son's new home!


Cognitive Dissonance's picture

New roof. So all the leaks will be new too.

<You are a sadistic bastard.>  :-)

Miffed Microbiologist's picture

Good luck to him CD but I must admit I was the happiest when Mr and I rented a little cabin on a large ranch from a cantankerous WWII vet. But I got pregnant and got too clucky. Poor mr. I now wish we would have stayed. But homeownership did teach us resilience and skills buying a fixer upper.


Cognitive Dissonance's picture

The emotional component should always be factored when considering home 'ownership'. Ultimately they feel they are moving forward with this purchase. If that solidifies the relationship and helps him push out of bed in the morning than I am all for it.

daveO's picture

Besides his wife demanded a house or extreme prejudice would befall my son. My son wisely decided that when momma is happy, everyone is happy.  :)

And, the foundation for the inevitable divorce has been cemented!
Seasmoke's picture

Forget 6%  ……… when ready to sell, just stop paying mortgage, play the hamster wheel game, 6 years of no mortgage AND property taxes.... that's the only NUMBER 6 , he should be thinking about. .....

Especially if he only put down 3%……………it's time everyone becomes an investment banker 

greatbeard's picture

>> a recent first time buyer

Well good on him.  If handled the right way it will be the best move he ever made.  Make paying off th mortgage priority one.  Once you have a mortgage free home its all downhill running from there.

I borrowed money twice for cars, three times for houses and paid them all off early.  The free and clear real estate is what allowed me to call the shots when things got dicey financially.  Even in the teeth of the housing collapse I was able to sell, and sell at a profit, and move on.  But I didn't stay out of RE, just bought cheaper.  I've now got a nice 6% first mortgage on the one place and a ton of equity in the second due to the luck of buying at what appears to have been the bottom.

Due to the above, I've got a place most anyone would be thrilled to live in and my monthly nut, (electric, taxes, no insurance) is right at $200.  Owning my RE free and clear allowed me to navigate to this position.

I read ZH because it tends to present things the way I feel they are, but you have to moderate the general negativity.  I know ZH has been hammering RE for some time but my boots on the ground experience has been completely different than their take.  Same with the metals and the markets.  Take it with a grain of salt and don't fight the Fed.

Winston of Oceania's picture

Except that he bought the property when prices are high since interest rates are being held underwater, er i mean low. He will be underwater when rates go up and prices go down.

Grande Tetons's picture

I wonder if there is a way we can get you into the Fed presser.  I would love to see the look on Yellen's face. 

i_call_you_my_base's picture

That NAR quote is stupid. Inventory won't change affordability unless there are corresponding price declines.

Yes We Can. But Lets Not.'s picture

Realtor: This is a great time to buy a home.  Lock in now with a 30 year fixed at super-low rate to finance the priciest home you can get approved for, and 10 or 20 years out when the crap has hit the fan, destroyed the fan, and the fan has been replaced in the reset, your investment will have been an effective, substantial, successful hedge, whereas anything held over that timeframe 'digitally' will have been withered or disappeared entirely ....

plane jain's picture

Nevermind the priciest home.  Go for the one with the most arable land and start some permaculture. In a good school district if you want to hedge against a long grind vs. collapse.

orangegeek's picture

Fewd stampz are collateral.  Finance new home, just don't eat for a while.

starman's picture

Lotsa short and premarket sales appearing here  in Commifornia again. 

Sales slowing inventories rising. 

Save_America1st's picture

"Despite YoY Existing Home Sales Dropping 7th Month In A Row, Realtors Declare Sales Decline Is Over."

Because they're mostly all a bunch of fucking back-stabbing cut-throat douche bag liars. 

SheepDog-One's picture

The real estate sales decline is over dammit! Do you hear us? OVER!! We need our 5% comissions for flipping houses to suckers......we hereby declare R/E sales to pick up wildly NOW dammit!!