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New Home Sales Collapse 20% From May To Dec 2012 Levels; Biggest Miss In A Year
New Home Sales in June plunged to 406k vs 504k in May (remember that 504k print was the catalyst for 'weather' is over and the market to surge: it somehow was magically revised lower by more than 10% to only 442K) Now that has soaked in, consider this is equal lowest sales print since September 2013 (and Dec 2012) and the biggest miss since July 2013.
The last 3 months of exuberance have all been revised significantly lower as follows:
- March: 410K to 408K
- April: 425K to 408K
- May: 504K to 442K
What is even more troubling in the "survey" vs "reality" world is this collapse in sales when NAHB Sentiment surged to near cycle highs. For context, this is a 5-standard-deviation miss from economists' expectations, below the lowest guess and a massive miss from almost highest estimate Joe Lavorgna's 510k.
Where the biggest revision was: sales in the West. One wonders how it is possible to overestimate sales in one region by 20%?
And this is all going to be quite a shock for the homebuilders...
Finally, here is your long-term recovery:
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sounds bullish, sell treasuries/buy stokks....
It was the weather.
What will the "subsidized foreign workers" do for worK? The horror!
/sarc
Who will be the first to blame "the Jews"?
King Barry
People with 29.5 hr/wk jobs just usually rent.
They also usually just pay the fine rather than take Obamacare.
This is why we need to replenish the pool of new home buyers by bringing in all these people from Hondouras
But... But... US is creating more Jobs which means a fucking flood of money to the economy isn`t?
I don`t know anymore if i want to see the circus on fire with all this bullshit crap incongruente data that`s beeing showed or if i`m worried..
Still a better deal to stay with Mom & Dad / Sis & Bro with all their eccentricities than to borrow from Wells,Citi,BofA,Chase or any of the cartel scumbags.
TPTB have been trying to destroy the family unit for years. How ironic that their greed and hubris is rebuilding familial ties for many. I live with extended family and everyone working/coming together through these hard times has been great!
That would make a lot of sense if he did. It would also put a lot of people in the uncomfortable position of agreeing with that man.
As much as I love hysterical hand-waving headlines, a drop from 442K to 406K is about 8% by my calculator. But since we're playing with numbers that all come straight out of the rubber room anyway, call it whatever you want. 20% is fine with me. For that matter, so is 50%. Or 80%.
Heh, yeah - prophalatic numbers for the numerically challenged.
442 was revised from 500+
and, because it will never get old:
http://research.stlouisfed.org/fredgraph.png?g=7iv
That 500 number messed up this pretty graph in May. Now we're back to where it belongs.
In the abyss.
I am reminded of NASDAQ 1999-2000
Here is how you get 20%:
I know what you meant.
The fact that algos react only in an upward direction should tell you that these numbers aren't what's driving markets at all. They're just the 'excuse du jour' for what's really driving things- the flood of central bank-supplied liquidity, worldwide, marching the markets inexorably higher. It's the only game in town.
We can quibble over a few thousand units or a few percentage points, but the overall new home market is running at HALF of what it would be in "normal" times. HALF. And yet that's apparently NO PROBLEMO for the markets. Record high after record high.
"the flood of central bank-supplied liquidity, worldwide, marching the markets inexorably higher. It's the only game in town."
+10,000 !!!
Combine that with the proposals to limit redemptions on MM funds reported here yesterday.
How will they ever pay for all those unfunded liabilities? Tax. Tax. Tax. Inflate. Inflate. Inflate.
So it's a wash eh?
I hear there is an IPO coming for a unicorn ranch...300X oversubscribed!
I've been selling "unicorn farts in a bottle" and sales are booming!
The green ones ?
Mistified that some troll would junk such brilliance.
And sell all your gold. Immediately.
Not a problem. I bought when it was hot over 1900 and sold at 1150 just like the guys at CNBC. We are gonna be so rich you suckers.
BULLISH!
Absolutely!
it's a Recovery! Jeez am i tired of saying that.. shit.
anyone else see LOTS of homes for sale...
Yes. In my recent hunt for an apartment I also drove around looking for homes here in Boca Raton, FL and quite a lot were up for sale.
I believe it's known as a "rush for the exits"
The DOW was red - No kiddin'. I seen it wit my own 2 eyez. It was I tellz-ya. I can't wait to tell my kids what I seen!!! Whew. I'm glad that's over.
Funny how this headline hasn't made it on the front page of Yahoo.
an hour later, and Yahoo finance still screaming something about how great Facefuck and Suckerberg are... lol
It's funny how long that story has been up when they usually rotate through headline stories on a regular basis . It's almost as if they are trying to hide something.But surely the wouldn't do that.... would they?
wow! the S&P actually went red for a few seconds on that number, I got a picture of it on my I gadget... now back to your regularly scheduled ramp fest to 2000 and beyond
Can't wait for the FED to raise rates. That should make things interesting!
Come on Mr. Yellen, I TRIPLE dog dare you.
(Schwartz created a slight breach of etiquette by skipping the triple dare and going straight for the throat.)
pods
no way Fed will raise rates...
Pods knows that. We are Japan. The ten year will hit 1% eventually and middle class people who once enjoyed a nice angus steak will be eating dog food out of a can.
U.S. will not be in 2 years, whats 10 years?
You can only pay zero.....taxes already go to interest
the commenrts about Japan and US being the same are wrong.
Japan stocks fell from 40K in 1990 to sub 20K (reaching as low as 7K) ie the Nikkei and still has not recovered (ie it dropped 70% and never got back to even 50%. its still only at 15300 ..where as US equities have broken back to new highes.
Also housing Japan property fells for over 20ys in a row between 2 to 5% every year for over 20ys (not one posative year) and prices are still down 50-70% from their peak, Japan population is shrinking by 250,000 a year for last 3ys and its expected to get worse (population to go from 127mil to best 100 mill and possible 80mm.. so in terms of demographics and asset prices theres no comparision, even if US stocks fall now the experiance is not the same..
You can not compare our stock market to Japan's as the U.S's stated policy is that the market is a policy tool. as far as demographics goes the U.S is a few years behind japan, but we have the same issue. The only thing that is slowing the process is the immigration policy.
Dr Engali... the immigration policy and the flood of unaccountable hot money from Chindia and South America bathing this housing market.
The US is caught in the same trap that Japan fell into is what Doc means.
How the US deals with it will be different (and bloodier).
pods
No politician was ever selected by pointing out previous or ongoing examples of utter failure now going on nearly thirty years; no.. this time it's different, after all we are Americans..
.."eventually and middle class people who once enjoyed a nice angus steak will be eating dog food out of a can."..
-optimist.. they will be eating raw dog before the happy days returns.
Raise rates..... Lol. I wish to God they would.
Oh, they will, Doc. Every so many years they try to prove they are not in a liquidity trap and they raise rates. Year later, everything goes in the shitter and they drop them again.
I'll be willing to bet a ham sandwich that the fed funds never goes above 1% again.
Done. One ham sandwich bet.
If the Fed funds rate hits 1% or higher, you owe me a ham sandwich.
If it doesn't, I tell you it just hasn't happened YET and you just need to wait longer.
Lol.... good one. I realize I said never, but we are going to need a time frame here.
I just KNEW you were going to say that. End of 2015 is too tight for my comfort (considering that they're not currently expected to begin until mid-year). End of 2016, sure. But that's one LONG damned bet. I could be senile by then.
And a sandwich could cost a billion USD by then too.
Unless you get the Chinese Special Pimento Loaf. And you do NOT want to go there.
pods
Anybody thinking this shitshow will still be going in 2016, is senile now.
One way or another, this is going to end very abruptly.The only managed decline
will be behind closed borders, with wartime rationing, just like it was in the UK from
1939 through to 1950.By the time they ended rationing there,nobody could
remember what life was like pre WWII.
Could be the template TPTB are going for, if we are not extinct first.
I am in, if it comes with cheese.
Liquidity trap prevents increasing rates.
To be fair, it has been too hot outside to buy houses.
but...but...but... the weather folks declared polar vortex for the summer...
We set 120 year record lows this summer in the south...
I own my house.....You tell me why?
I don't pay your taxes you take it from me.....That is what is wrong with this world....and then some
Thanks for the news. You'll have to excuse me; I have homebuilder stocks to buy.
MY GDP ESTIMATIONS
USA, -4%
CANADA, -2%
GERMANY, -2%
EU, -6%
CHINA, -8%
WORLD, -5%
Economy will rebound only and only when oil drops to $30-$50, which is inevitable
ekm,
Inevitable, yes. And a plunge in oil production to accompany the plummeting price.
Incorrect
Price affects cost, not vice versa.
Lower price would mean that they will force lower costs downwards.
That's how it works.
Production never stops.
ekm1,
Perhaps you're right--as long as drillers want to lose more and more money.
https://www.dmr.nd.gov/oilgas/stats/historicalbakkenoilstats.pdf
About 1900 wells year over year ($10 billion) for about $700 million in revenue (if oil $100 per barrel).
Drillers won't lose money at all.
Government will simply provide rebates and make them profitable instantly.
Production won't stop
This is a physics problem, not a money problem. Physics trumps money. We do not produce enough in the US to maintain our current lifestyle, much less the lifestyle from a decade ago. "Rebates" means more deficit spending. More deficit spending means devaluing the dollar more. Eventually, that will kill the petro-dollar system and we won't be able to import as much (if any) oil.
Learn what the fuck energy is.
Do you actually realize that you don't know what you're talking about, or is this just some kind of insanity?
All costs are labor costs.
A lot of other costs are taxes.
What is COST?
Costs are very, very very adjustable, particularly government taxes and rebates.
ekm1,
Well, if you're right (but you won't be), it will be very different from the plunge in production in 2009 after the price drop.
Production fell not because of price, but because of oil being dumped into the CONSUMPTION market from onshore and offshoer storage.
It was in storage as collateral for derivatives.
What matters is PROFIT.
Profit = Revenue - Cost
Costs are adjustable, particularly the government side of costs
Some guys laid this out recently on the primary oil blog.
If you look at per capita oil consumption in Saudi Arabia, it is #1 at 0.1 barrels/day/person. The US is 0.05. China and India way behind and surging to catch up.
If you have little GDP, your consumption does not go to zero. If you have lots of GDP your consumption goes way way way up.
Now, you can make a case for there being minimal necessary consumption of oil because it is, after all, the equivalent of food. But if you raise GDP you WILL raise consumption (and pressure price up) and if you smash GDP you WILL lower consumption (and pressure price down).
You just seem to think consumption is GDP independent. If that was so, China's consumption would be 4X that of the US. It's half.
Costs to drill 8000 feet and frack are NOT adjustable and could never be adjusted to work economically for $40 a barrel oil. In fact, they are leveraged out to make the math work now and that math is going to catch up with them eventually...
North Dakota oil output is over propagandized.
The gulf is what matters
USA produces 8.5 million barrells per day as opposed to 7 million a couple of years ago, but still consumes about 18.5 million barrells per day.
Saudis and Canadians rule and will always rule.
People are confusing Crude oil with Natural Gas.
Government rebates can make those operations profitable instantly
So your argument is that anything is profitable as long as someone else is willing to endlessly bail them out. Fantastic. How would a small business owner get in line for such largesse? And if he was getting it, why would he produce ANYTHING but the bare minimum so he could maximize bailout gains and reduce loss causing overhead and operations? The end result of endless subsidy to a profitless operation is naturally a reduction in production or a reduction in quality because that is what is losing all the money.
Your problem is you have zero functional understanding of economics.
We live in communism, currently
Economics = Politics right now
Government controls everything.
Capitalism is dead
What I just said applies to Communism as well. There is no incentive to react to demand. A shorage, reduction in production, and price increase is inevitable. History shows that is exactly what happens every single time.
I lived in communism. I am an expert of communism
The issue that ekm has that he believe there will ever be a chance at a true organic recovery. It ain't happening. Ever. Never gonna happen. The 80's and 90's are over. They were an anomoly. We are not going full blown communism on our way to a recovery. We are going full blown communism on our way to full blown communism.
There can be recovery if oil dumped for consumption, not held in storage for derivatives.
As it happened in 2009 when oil dumped and got to $40, economy rebounded organically.
Communism thing won't change anytime soon. Rebound will be small, but at least there won't be any contraction as it is occurring now
There will never be an organic rebound. If oil doesn't kill us the debt levels and the extreme over capacity in every sector will. Growth is dead...period. War is inevitable.
Debt is easy. It will be defaulted on.
That's a good thing.
Financial wipeout is NOT economic collapse.
Financial wipeout releases the real economy from debt chains and economy starts rebounding
Yep, is this really Ron Paul?
"Financial wipeout is NOT economic collapse"
Tell that to the sixty year old who loses his job, can't find one, can't live on unemployment, can't get disability or is too young for social security. Does this depend on what the definition of "is" is?
Economy is shrinking due to excessive claims on output.
It makes no difference. That money can't buy much if output is not expanded
There are no tankers holding oil for higher price. The very largest (never spoken of for this legend of holding oil off market) hold 2 million barrels.
The US imports 6-7 million bpd. The supposed tanker storage is holding less than a day of imports.
If you want to hold oil off the market, the place to do it is underground. If the Saudis decide they make enough money exporting half of what they do now, and will keep the rest for the grandkids, and the Russians decide the same thing, this world will explode.
But this has nothing to do with tankers.
A lot of oil is stored onshore, most of it actually.
Cushing storage is leased for private storage and a lot of it is not reported.
World is storing oil onshore and not reporting it
http://321energy.com/editorials/energyreport/energyreport092912.html
The SPR is for emergencies and has NEVER emptied. It's not there to make a profit or to drive or hold price up.
Look, you don't understand oil, but if you really WANT to be contrarian, there was another comment that goes like this (and has merit).
If you raise the price of oil should this pressure consumption down? The concept is NO. It will raise consumption. Why? The poor will be denied gasoline. So governments will subsidize it. Presto, increased consumption.
There, now you can be contrarian.
SPR is in Texas, not in Oklahoma.
SPR is totally a different thing
That is probably the most ignorant statement you have made yet. I promise you that companies which are unable to make a profit selling products close down and production does stop. This is an economic fact proven during many attempts at price control.
You are assuming USA is a capitalist country.
No, it is not, it is a communist country.
Capitalism is dead.
Government control almost everything.
It's never been a better time to buy a nail gun.
ruger-22
Except good luck finding 22 ammo...
skulls way too thick for that one.
FOMC next week...cue the mission impossible theme music...
Why don't we just build a new illegal immigrant community in Detroit......Problem solved!! Bwahahahahahah!! Let the mexicans and the jigs duke it out!!
This statistic should be right on...I mean either a house sells or it doesnt...easy to track I would think....guess not...
There is that issue of revisions, isn't there.
I guess they revise it to take care of all those houses that closed in May but the buyer changed his mind, moved all his furniture back out and gave it back to the seller, who had to renege on his new house buy and move his furniture back in.
Must be lots of those.
interesting trend in the misses starting in March...have to wonder how long that's going to continue.
The downturn is going to continue for a long time. I live outside one of the most wealthy areas in the entire country, if not world. Building houses was going gang busters through May, and as I previously observed about a month ago, things strarted grinding to a halt.
There's several 'fallouts' in my area already. The "SOLD" signs that builders flash have been replaced with "AVAILABLE." There's still a sh*tload of people who cannot afford a house but try anyway not giving ahoot about their debt levels or consequences. The thinking has evolved to the "I'll just walk away" attitude.
What a cultural shift!?
If it were that easy, we wouldn't need government.
Do those figures include trailer homes?
One wonders how it is possible to overestimate sales in one region by 20%?
They overestimate more that 40% and told about only 20%..
About that jobs number
3 million Americans now without unemployment benefits due to congressional gridlock - The Washington Post
The number of Americans who would qualify for federal long-term unemployment benefits -- a program Congress allowed to expire in December -- has now hit 3 million, according to Democrats on the House Ways and Means Committee.
The 3 million mark comes months after the Senate passed a bipartisan deal that would have restored federally-provided long-term unemployment benefits, but that bill was never taken up for a vote in the GOP-controlled House.
And this
Reid Doubts Unemployment Extension Will Come Up in Highway Bill Debate | The World's Greatest Deliberative Body
He signaled that he did not think extraneous items would be attached to the must-pass bill, regardless of which version advances. ”I doubt it” Reid said when asked if an unemployment insurance extension would be a piece of the Senate’s highway bill debate.
So have those 3 million found jobs? The game is clear 3 million falling of the Government ( State ) roll...no longer accounted for. This brings the data that they rely on so much into context and debate for sure.
But will be ignored.
Household formation is still a fucking joke, and the US is heading where the Asian countries have been for a long time now. Living with the 'rents.
All weather All terrain TENTS! FORWARD!
Good time for the government to create shell government companies and IPO them. They'll make more money than raising taxes.
But... Bloomberg says that the world is fine!
Some headlines from today:
Hamptons Home Sales Rise as Buyers Find More Inventory
Asian Stocks Near Six-Year High After HSBC China PMI Data
Treasuries Drop as U.S. Jobless Claims Decline to 8-Year LowAnd I see that stawks are slightly up today, as well as gold down almost 1%.
Clearly, TPTB are still in FULL control... (until they are not)
It's too hot to go looking at new houses.
BaaaWaaaaaHaaaa.....
the house flippers took their windfall profits and they are vacationing in the hamptons, same thing used to happen on wall street when it was the gogo market
hmm 2 standard deviations in anything is considered the limit, so 40% of that 20% is 8%. gee maybe i have a career as a government economist?
I can tell you exactly why the drop....
https://www.youtube.com/watch?v=7YBCYzZMWfg
It's gotta be Putin's fault.
A new article in Newsweek provides quite a bit of insight into Russian President Vladimir Putin's daily routine and private life.
The writer, Ben Judah, spent three years interviewing those close to Putin for his book "Fragile Empire: How Russia Fell In and Out of Love with Vladimir Putin."
Judah's insights into Putin's life come from former prime ministers, current ministers, regional governors, senior bureaucrats, close advisers, and personal aides to the president.
Here's what he learned:
Putin sleeps in. He wakes up late in the morning and eats his first meal at about noon. He always has cottage cheese with his breakfast, and he also likes quail eggs and fruit juice.
He does "much of Russia's thinking" in a pool. Putin always goes for a swim after breakfast because he likes to get alone time in the water. He wears goggles and swims in a front crawl.
He does a daily "cleanse." He works out after his swim, preferring weights over cardio in the gym, and then immerses himself into both hot and cold baths.
He doesn't like the internet. His offices don't have TVs, and he uses "only the most secure technologies" to communicate, which to Putin means paper and fixed-line, Soviet-era telephones. Putin rarely uses the internet because he "finds the screens within screens and the bars building up with messages confusing."
He's high maintenance. When he leaves Russia, Putin ships in Russian cooks, cleaners, and waitresses for his trip. When he stays in hotels, his team removes their sheets and toiletries and replaces them with Kremlin-approved items under anti-contamination seals. He doesn't eat any foreign food that hasn't been cleared by the Kremlin.
He doesn't like spending time in the Kremlin. Putin lives in a palace outside Moscow because he dislikes the traffic, pollution, and "human congestion" of the city. He doesn't like visiting the Kremlin either and prefers to work at his estate.
His inner circle calls him “Tsar.” They used to call him "Boss."
He doesn't have much of a personal life. Putin's parents are dead, and he and his wife divorced. He has two daughters, but they don't live in Russia. He reportedly has women — models, photographers, and gymnasts — "come to him at night," but these are just rumors. Putin does, however, take comfort in his canine companion, a black Lab.
His life is monotonous, but he fancies himself a hard worker. Putin claims he "works harder than any leader since Stalin."
Read more: http://www.businessinsider.com/newsweek-story-about-vladimir-putins-life-2014-7#ixzz38OssyVcu
Ahhh... blame it on the weather.
Start accepting student loan money for down payments and you'll get those homes sold.
Naturally, the equity *markets* rose off the daily lows on this report.
Naturally, Gene.
Sell them? Why sell the new homes? Don't ya know, in China they just build 'em. Selling what you build is so 20th century...
...and the song that Fed and market shills will sing will be one Milli Vanilli sang (or lip-synced as the case may be) in 1989,
Gotta blame it on something
Blame it on the rain (rain)
Blame it on the stars (stars)
Whatever you do don't put the blame on you
Blame it on the rain yeah yeah
You can blame it on the rain
http://olduvai.ca
Most of you are just bitter idiots without a clue who follow the leader in bashing anyone making money today.
But some of you have a decent understanding of the current state of the markets. So my question is if you know the Fed has rigged the markets to keep climbing why don't you either invest your own capital or raise capital to actively manage in the markets? Get with the program.
So, if something is rigged, jump right in? This is known as 'bigger fool investing'.
As soon as they start accepting EBT for mortgage payments, this beeyotch will achieve escape velocity.
New Housing Starts moved to New Condo Starts for better margin and
the trend is not recovering back to New Housing Starts. Construction en masse has moved on to condo building for now. Single family homes are
not pulling in the same profit whatsoever. Ask a homebuilder near you.
I sure hope I don't get priced out of this market forever
"How will they ever pay for all those unfunded liabilities? "
www.youtube.com/watch?v=TRgRz3nSG7o