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The Last Time Homebuilder Confidence Was This High, The Housing Market Crashed
NAHB Sentiment jumped (again) to 62 (from 61) - its highest since 2005. The last time homebuilders were this exuberant, home sales collapsed.. reminding us of Upton Sinclair's classic line, “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
Well they nailed it in 2005!!
Just ignore this...
In this case, with mortgage applications indicating anything but a healthy housing market, "It is difficult to get a homebuilder to admit all is not well when his entire career depends on his ignorance of reality."
Charts: Bloomberg
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Looks like they are betting on no hike.
Mortgage apps are down because in the new robust economy people are simply paying cash for their new home.
There’s a reason for the exuberance – the dollars are rolling-in – look at the YoY rate –
https://research.stlouisfed.org/fred2/graph/?g=1R2P
And nowhere near recession levels.
It's different this time. NEVER, EVER been a better time to buy!
The market started crashing in July around here.
Confidence in Janet Yellen, indeed.
sentiment, or how people 'feel' is always lagging or best coincindent indicator. people feel good AFTER mkts go up, or builders see a good couple months.
mystery question: if existing home inventories are so tight, why are prices softening? if its a sellers mkt, why are inventories tight??
maybe b/c people see if they sell they have to go buy something else just as expensive? any natural move-up buyers or new/first time buyers able to buy, have already bought....there is not an endless supply of people willing AND able to sign a 30yr note. There are NATURAL obstacles to endless growth.
Psychology and "group think" play a huge role in an economy - even one as manipulated and artificial as ours (U.S.). Remember that 90% + of the American population is brain-washed and in denial about many things. …also, remember that the MSM is their only source of information, and indoctrination camps (Public Schools and Universities) "educated" them. The MSM, government, and schools are both controlled by a powerful few.
To try and answer your question, I would proffer that inventories are tight and prices are softening because many properties are bank owned. With QE and all the other monetary voodoo, it is better for the banks to keep those properties on their balance sheets rather than place those properties on the market where they would most likely have to sell these "assets" at a lower price than what they are currently valued at on their books. Basically, they don't want to to right off bad debt.
Seems to me that no hike it is.
Even with no hike, sentiment at whatever, the houses in the town I work (Fremont, CA) are about 9Xmy annual salary.
And I don't feel like my level of compensation is the problem, I do better than many. House prices need to be cut by 50% to get my attention.
There recently was a show on the teevee about your town's real estate prices and other changes as I recall.
Using price/annual income as a good rule of thumb for purchasing, I think the long-term (100 years plus) pricing has been something in the range of 2.5X - 4.5X, with prime locations like beach towns etc. being at the higher multiplier and above. It is plain to see the whacked out prices based on this metric. And I think that the ratio should ideally reflect just one income as well.
in NJ where the population is barely increasing....they are building thousand upon thousands of houses in massive complexes. Hard to fathom.
Where do you think they are going to put all the Illegals when the shit hits the fan.
Unemployed residential Electrician here in Calgary, Alberta, Canada... market sucks
Sorry to break the bad news, but Canada's housing bust is just beginning.....
too bad you're not in commercial. 5 mill sq ft of office space under construction in Calgary. Won't end well.
Ah fuck, not the fucking NAHB Confidence again?
How about the fucking NBR's rosy sphincter predictions?
Who fucking cares about this assholes?
As you hinted, Tyler, these fucking people are in the house selling business. They wear yellow plaid coats during the day and fuck their animals at night (it's kind cute and sick at the same time).
Sales people in the permanenetly rosy sphincter mind-control class will follow the lawyers, bankers and Congress into the ovens after the revolution...
Love and kicks,
Alexa
Yup. like that azz hole economist at the Realtor org (Lawrence Yun). Nothing but paid shills.
Who exactly are the Homebuilders Assoc trying to convince everything is awesome - I'm thinking its more themselves then potential buyers.