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Pending Home Sales Tumble From Recovery Highs, Biggest Miss In 2014
Following last week's collapse in new home sales (and last month's massive beat and surge in pending home sales), it was likely not a total surprise that pending home sales would slow, but the -1.1% MoM print is the worst in 2014 (and the biggest miss in 2014). The median existing home price continues to rise (up 4.3% year-over-year) but this is the slowest rate of gain since March 2012. NAR is quick with the excuses and this time.. no weather is to blame.
From biggest beat to biggest miss in 2014...
And the excuse train is here...
Lawrence Yun, NAR chief economist, says the housing market is stabilizing, but ongoing challenges are impeding full sales potential. “Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved,” he said. “However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates.”
Yun forecasts existing-homes sales to be down 2.8 percent this year to 4.95 million, compared to 5.1 million sales of existing homes in 2013. The national median existing-home price is projected to grow between 5 and 6 percent this year and in 2015.
Some context...
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Don't worry, I believe the Fed gets its new 3-D printers installed, so Janet can now printe dollar, houses, and dildos.
Meh, negative numbers will be the new normal.
Get ready Bitchez.
Wait a minute! Isn't hot weather too hot for house hunting?
As a staunch liberal, I'm here to tell you that the truth is we're just not taxing people enough. Housing would pick up greatly if we threatened to tax people 95% of their income UNLESS they buy a house. That would really boost our housing sector.
More homeownership = Bigger Property Taxes = A big raise for meeee!!!
I've oft suggested attaching electrodes to genitals and applying increasing shock to said parts until desired purchase is made (to clarify, government desired, not necessarily desired by the consumer). This would solve a lot of problems.
You're wrong about deflation. All the central bankers know is print,print, then print some more. You can't have deflation with trillions of dollars swirling about. Get some gold, bitchez.
Does anyone own MBS other than the Fed?
Yes. After getting a big raise from President Obama, I plan on getting a new Mercedes Benz S-class soon.
Doesn't this concern anyone else? As people default the Fed will steadily become the largest owner of houses in the U.S. Am I missing something? A made up entity that started with zero dollars is progressing the being the largest owner of tangible assets in the U.S.
A female blow up maybe, but not a dildo.
Retarded 2nd mortgage lending is back!!!! TCF bank is now offering 2nd mortgages to 90% of a homes value here in CA! Not hard to figure out these 2nds will go bust once the next housing down turn hits.
Tyler I think this deserves it's own post!
TCF Bullet Points Info -
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TCF DOES NOT OFFER FIRST LIEN HELOCs – HELOC must be in second position behind new first mortgage (purchase or refinance) processed and originated by your firm.
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OWNER OCCUPIED ONLY– no second homes or non- owner (investment) properties
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No non-occupant co borrowers
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Single family homes, condos and O/O duplexes OK. No triplexes or fourplexes.
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No I/O’s –OK behind amortized ARMS –TCF qualifies at First Lender’s Qualifying Rate.
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Cannot have more than 6 “non subject” properties – financed or free and clear
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Max 89.99% CLTV*- for Combined liens of $750,000 or less
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Max 85.00% CLTV- for Combined liens to $1,275,000. Max HELOC $350,000
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*Condo guideline change! Max 89.99% CLTV OK for Condo Purchase or Refinance!!
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TCF Pricing
80.00% CLTV or below Prime + 1.49% = 4.74% (start rate based on Prime@3.25%)
80.01% CLTV to 89.99% Prime + 1.99% = 5.24% (start rate based on Prime@3.25%)
·
HELOC Terms-10 year draw period with min I/O payments; 20 yr repay period;
18% Life cap $75.00 annual maintenance fee. Early Termination fee has been eliminated.
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Borrower can have full draw, partial draw or zero draw at closing!
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TCF will use your appraisal, subject to a TCF ordered Desk Review.
Appraisal cannot be > 90 days old at time the AMC performs the Desk Review.
Desk Reviews ordered on all loans regardless of CLTV; turn time is 5 business days.
Property purchased less than 12 months ago –use lesser of acquisition/current value.
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No Title Insurance required for Simultaneous Close HELOCs with line of $250,000 or less. If HELOC >$250K, TCF requires a Jr.Lien or Flag Policy covering full HELOC.
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Minimum mid Credit Score- 700 for Combined liens of $750,000 or less-primary wage earner only! 720 for Combined liens > $750K: No min score for Co-Borrower. Arizona transactions – 720 minimum mid score required.
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Max Ratios of 38.00/45.00 Cannot exceed either of these max ratios!
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How we Qualify: 30 year P & I@HELOC Start Rate (4.74% or 5.24%) plus
Payment Shock Factor of .0018 x the line amount ($180 on a $100K HELOC)
We look forward to working with you in 2014!!
Joanne Fabiano or Jhonda Stamper (my Inside Partner in Minnesota)
jfabiano@tcfbank.com jstamper@tcfbank.com
(707) 666-1102 (612) 661- 6734
For TCF forms, Submission Instructions or for help with a file in process, please contact: Jhonda Stamper jstamper@tcfbank.com (612) 661-6734
Scenario assistance, Bret Knettel bknettel@tcfbank.com (612) 661-8917
We have borrowed home sales well into the future using zirp. How many homes can one family live in?
regular amurikans otherwise know as slaves, cant and dont want to get a mortgage. the end
Can't get a mortgage is the real issue. There always have been those who don't want to get a mortgage.
The question to ask is how many families live in one home now.
Print Mr. Yellin! Print!
All time highs right back to all time misses....death spasms of the Ebola terminal patient.
Don't buy until explosive diarrhea.
This thing will come back from the dead a few times... if it opens down tomorrow, then buy with both hands and feet....
Negative numbers turned positive eventually with the numerous adjustments.
Elections are coming up. Can't have bad numbers.
The politicians are pretty much just hoping they're not killed by mobs.
We need moar zero-down, no interest for 10 years, never-pay-back loans.
That's the New Stimulus Package these days.
Hard to get qualified for a mortgage when there are less good jobs, people working for shittier pay and barely making enough to keep up with a car payment on a 72 or 84 month auto loan.
Well, you know what would solve that: More immigrants!
/sarc
It's hurricane season in Florida, so this was expected.
Just ask LIESman.
In the Era of Climate Change, the problem is always the weather.
it was expected to be a slow storm season...Liesman needs another strawman
Buy a house without a job. Good trick if you can swing it. Does $10/hr at McDonalds count?
Home sales fell and prices went up? No.
Home prices are not actually rising. This is a statistical slight of hand being pushed by NAR.
What is happening is that the market is collapsing from the bottom up. Low and median priced homes are not selling as people think prices are too high or the buyers simply cannot qualify for a loan.
So that leaves higher priced homes being disproportionately high as a percentage of home sales. Voila! "Rising" home prices!
Your realtor didn't mention this to you, did they? LOL
And what fuels this continued buying of overpriced homes? Scared oligarchs from China trying to launder their money ("their" being a euphemism, of course) into something tangible like LA real estate. They are fleeing China with wealth that in a short while will no longer exist.
Wealth inequality in China is driving these high end home sales.
I don't really listen to the tiny realtor, former-first-grade-teacher, down the block. I just enjoy watching her tiny butt wiggle in that mini she wears to help sell houses...or when she climbs in to her Brand New BMW that most realtors seem to enjoy these days.
Does she have bleach blonde hair and chiclet teeth? Is her soft porn picture featured at the grocery store with every shopping cart? Does she wear her fuck me pump shoes?
I agree that maybe statistically this is the cause but it't not like that everywhere. For example here in Las Vegas, houses under $300K are not available. We have so much investor & foreign money being poured in to real estate here that the average Las Vegen can't buy a house. Anything under $300K is being bought cash and has multiple bids on it, as thats the magic number where in the even that you need to rent the property you can still make positive cash flow (if you decide to get a loan and get your money back out). This in its self is a real problem as its forcing familes to rent and not buy as they can't afford anything more with the low wages that area is seeing since the crash.
Yes, Lost Wages (Las Vegas) has a lot of Chinese investors. Chinese in China and Canada are hankering for some solid possessions before their phony money takes a dive.
But best to rent for now. Those folks are apparently running afoul of the Chinese Authorities as well and this money laundering in real estate is supposed to be stopping. Keep watching the trends. These crashes in value occur very abruptly.
And with investor money so big in the market I expect the "abruptness" to be even more jarring. Once the drop is apparent these guys will be the first to the exits.
I live in the Charlotte area, and watch home prices very closely. In various areas in the city and surrounding area houses between $130-$200k sell very well with many all cash offers within 2-3 days of hitting the market. The market between $400k-$1mil+ is very stagnant.
double post
The median price increase is driven by a collapse in sales at the low end.
As always, Propaganda cannot defeat the reality of Math. Someone should do an analysis, ex-cash and foreign buyers, of the real demand out there for the median home price in excesss of $230K with the declining median family income at less than $47k.
IN all seriousness go long on housing, it is eventually going to skyrocket. Why? Well back in 1999 the US Census Bureau released a study that projected, based on then current immigration levels and non-traditional er American birthrates that the population at the end of the 21st century in the US would be ONE BILLION. I would think with the GOP crafting an amazing increase in the various alphabet work visas AND green cards for ALL foreign STEM students, and the Senate bill crafted by Rubio, McCain, Schumer, the Gang of Eight, increased LEGAL immigration by 3x. The fastest growing race, according to current Census reports, is ASIAN, in the US, so you look at these facts and the influx of New Americans at UNPRECEDENTED LEVELS and they all have to live SOMEWHERE so BULLISH on housing, SHORT on WHITEY, that is my financial advice at this time.
Or YOU CAN STAND UP AND FIGHT THE OLIGARCHS!
Richard Cotten, June 1966, Conservative Viewpoint
so what - pray tell - would a Billion People do for a job?
All u see is more and more houses for sale here in NJ. In the $400,000-500,000 range and hardly a single one has moved since spring.
Same thing I am in the same corridor and sales have ground to a halt. A bunch of new homes built that remain on the market - high 6 figures.
Same here in fly over country.
Are people actually getting smart and realizing how much income it takes to buy one of those at those prices? And if you loose your job, which you will.....
On the flip side, you could have bought some distressed properties around the greater Denver area before marijuana legalization for $100k. Some very light fix-ups and you could have sold them for $500k+ after marijuana legalization. They would have sold in minutes after putting them on the market, no less.
Location, location, location. Nobody wants to live in NJ.
"$400,000-500,000 range"
These homes are for upper middleclass Americans. And those folks don't exist anymore.
Expect prices to remain flat and then precipitously fall.
Home prices follow a saw-toothed pattern of slow rise and then quick fall. The rise occurs over several years and then the majority of price collapse occurs with in a 7-12 month period.
I am in NJ also, and we have a street with 6 or 7 homes for sale in the 700k range, they just sit there. My opinion is if it's above the 430 or whatever "conforming" is these days, it's not going to sell.
Ahhh...the "staring game". It is so pointless. Seller keeps staring out the window at the backs of potential buyers who won't take the bait. It can go on for several months before the reality of the current market sets in.
Behind those stares are a real estate broker and salesperson who keep whispering "real estate never drops in value!" into the ear of the seller. But after a time, they capitulate too and settle for "Volume" rather than a higher commision. So much ego involved.
Sad and pathetic to start believing your own lies.
Wait them out, Dead. The "deal of a lifetime" happens every 5 minutes.
Pending and new home sales are down, and there is "a supply shortage". Then build a bunch of brand new fucking spec homes dumbass! Come on, start fucking building. Hire a bunch of mother fuckers and go build some more fucking inventory.
Fucking NAR moron. You know why they are not building? NO DEMAND ASSHOLE!
No problem with demand for the debt tho.
Hm. Go figure.
Oh, there is demand. It is just not hungry for a millstone mortgage in the $400k+ range.
And the builders are not building because they don't want to be caught in the pending collapse in house prices.
Think about it. Who has more at stake in the real-estate game than a builder/developer? Putting all the spin and NAR propaganda aside, the builders NOT building tells you everything you need to know.
They see the shadow inventory, the broke would-be buyers, the pending retirement avalanche of baby boomer homes/downsizing and the tenuous nature of the international investors and they are running is the opposite direction.
And they see the banks slow-walking the Notices of Default process and the huge number of delinquent mortgage payments. Builders have too much on the line to ignore the facts.
Builders will take a fair gamble but this market is guaranteed to collapse anytime now.
This current market cannot be compared to any other period in real estate history - unprecedented foreclosure games by banks and judges with rulings that make no sense based on the facts presented coupled with cash purchases by other than final user of the property - all says there is another step to this windup process from 2009
"...another step to this windup process..."
Well, the fundamentals are the same no matter what rigging is underway.
Do we know how long the Fed can prop up the banks? Do we know how long the banks can postpone flooding the market with shadow inventory? Do we know how long the interest rates will be able to stay so low? Are there factors outside the control of the Fed that will cause a sooner than expected unraveling?
Is the foreign money starting to dry up?
Too many questions. I'm not convinced that the masters of the universe even know or fully control these parameters.
So I always return to the fundamentals of housing prices being a function of the health of the job market.
And I never believe that "This time is different" on any long term basis.
I am really looking forward to Wednesday's GDP release. It will either affirm last month's number was just noise, or it will prove the GDP calculation is fundamentally flawed and needs to be "corrected".
Fuck housing, the fake recovery, the Fed, and a complicit feral Federal government until the fraud ends.
Pending or existing?
Existing drop is a drop.
Pending drop is a timing issue.
I am renting and I make a great salary and I have a great credit score. The thing is, I don't feel comfortable with my long-term employment outlook. Here today and gone tomorrow. The layoffs I saw earlier this year and throughout the industry scared me into rethinking the whole housing debt scenario. By the way I'm prequalified for a mortgage and the mortgage people call me every other day to see if I've found my dream home. This is a ponzi market that needs to correct. I'll just wait for all the Chinese and Russian money to get scared out of the U.S. by Obama's foreign policy war drums.
While I continue to read ZH most days, and most especially the postings, as ZH has a fantastic readership, I seldom post anymore... today seeming to be an exception. Frankly, I have just about run out of novel things to say.
The economy is heading to disaster, the world towards war ( take your pick on how it will begin... perhaps a pool would make this part more interesting)... mankind is on the verge of a disease epidemic because 1) we are due, and 2) we are at the end of the age of antibiotics... the Luddites were right, and technology is destroying us (HFT anyone... Just to keep this argument on an economic theme)... the Jews are at the bottom of it all ( this one I don't particularly ascribe to, although they are a stiff necked arrogant people... besides, I was married to a Jewess years ago, a gentle, beautiful lady who had the ill grace to die while we were both quite young)... Have I missed anything? Ah, yes... Market manipulation, how could I have forgotten that one... along with the many mysteries of TPTB...
Perhaps things will get more interesting after the great reset... leading to yet new possibilities for dialogue. That is assuming that we still have a power grid, and some sort of means of communication more effective than irradiated pigeons.
Till then I will chime in occasionally with a pithy if not witty remark just to let folks know that I am still alive, and still enjoying the lively banter...
Look at it this way: Things could be better once we go through all this and come out the other side. At least you can't say it's boring.
If they had let the markets correct, esp the housing market like they did back in the 1980s we'd be out of this mess right now. Instead, prices are articially high relative to just about everything. The Great Correction is still hanging over us imo.
Quick! Offer any and all Chinese free airfare and suspend the "are you carrying more than $10,000?" interrogations. We gotta keep those Chinese dollars coming!