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Housing "Brightspot" Burns Out - Existing Home Sales Plunge Most In 7 Months
After an almost incessant rise since January, Existing Home Sales in August plunged 4.8% (the most since January and dramatically worse than the -1.65 drop expected). This is the 3rd biggest monthly collapse since the financial crisis. While the Northeast saw no change, The West (down 7.8% MoM) and South (down 6.6% MoM) saw the biggest plunges in sales as median home prices fell for the 2nd month in a row. It appears the one brightspot in the economy (according to mainstream media) has burned out as affordability and excitability come to a turning point.
An ugly month for sales: (must be the weather)
Chart: Bloomberg
Lawrence Yun, NAR chief economist, says home sales in August lost some momentum to close out the summer. "Sales activity was down in many parts of the country last month — especially in the South and West — as the persistent summer theme of tight inventory levels likely deterred some buyers," he said.
But, always eager to find a silver lining, no matter what the data says,
"The good news for the housing market is that price appreciation the last two months has started to moderate from the unhealthier rate of growth seen earlier this year."
Speaking of prices, this is where they stand: "the median existing–home price for all housing types in August was $228,700, which is 4.7 percent above August 2014 ($218,400). August's price increase marks the 42nd consecutive month of year–over–year gains."
And on a YoY basis, the slowdown in not only transactions but prices is starting to be felt.
The regional breakdown:
- August existing–home sales in the Northeast were at an annual rate of 700,000, unchanged from July and 6.1 percent above a year ago. The median price in the Northeast was $271,600, which is 2.4 percent above August 2014.
- In the Midwest, existing–home sales declined 1.5 percent to an annual rate of 1.28 million in August, but remain 5.8 percent above August 2014. The median price in the Midwest was $181,100, up 4.0 percent from a year ago.
- Existing–home sales in the South fell 6.6 percent to an annual rate of 2.14 million in August, but are still 5.9 percent above August 2014. The median price in the South was $196,300, up 6.0 percent from a year ago.
- Existing–home sales in the West dropped 7.8 percent to an annual rate of 1.19 million in August, but remain 7.2 percent above a year ago. The median price in the West was $321,300, which is 7.1 percent above August 2014.
The total sales breakdown show that the South remains the all important region for the existing housing market.
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I knew this as soon as last month when homebuilder stocks were pushed.
Oligarchy/Plutocracy 2016 2+2=5
… brown shoots?
Fewer and fewer want a "used home" smelly and dingy ... when the zero-down, little doc lenders will put in a Brand New Shiny house with all the latest doo-dads and you put zero down! If you don't want to, simply stop paying your mortgage and live for free for months before they ask you to leave. And with all the special programs, they may PAY YOU to move in right away to fill their quotas.
There's an estimated 13 million+ people who have this sweet living arrangement.
In an 'industry' made up of 100% salesmen, you're considering even rough numbers as credible?
(not you NOR)
The Chinese left the real estate market. Nuff said.
Don't fear bad news mi amigos, stocks up after the numbers. woooo hoooooo.
This'll just make the home builders even more optimistic......
A little off topic, but Bullard has come out swinging lately -
http://finance.yahoo.com/news/bullard-summers-leave-u-policy-114236356.html
So the Fed tells the administration to "fuck off!"? Looks like more lines being drawn for the ultimate blame game.
They have to keep promising to raise rates to keep the dollar bid. At the same time, they don't want to be alone in not hiking them.
Still dangling the rate hike. Seven years all talk.
And home sales will plunge even more the next 2-7 years as prices are cut in half due to rates blowing up.
More money will flow to euities.
Short term, wave 2 up should retest SPX 1990-2000, after that Lower Lows are expected.
Going into 2016-2017, stock will show one final Higher High and then Kaboom!
http://tripstrading.com/2015/09/19/sp500-weekly-chart-2-or-5/
http://tripstrading.com/2015/09/20/sp500-my-favorite-scenario-cyclical-a...
Even if they QE some mortgage bonds to keep rates low, prices are still going to tank. They're back to 2006/2007 peak in many (most?) areas. Those prices were affordable and unsustainable then, and that was with wages higher than now. I wouldn't be surprised if near all the gains of Housing Bubble 2.0 get wiped out even if sub 4% mortgages are available.
Still waiting on this and so far it's not happening. I am seeing drops in prices here in No. Va. area but not nearly enough and what I am seeing so far is just cyclical out of season price drops. This year was crazy. We were going to buy early this year but circumstances came up and then the prices shot the moon all of the sudden. Looking to buy now again but I keep waiting for another crash that isn't coming and the wife is starting to get pissed living in this nasty rental...
Looking to buy now again but I keep waiting for another crash that isn't coming and the wife is starting to get pissed living in this nasty rental...
Feel free to jump into this retarded market where 20% down doesn't get you rental parity. Hope it works out for you...
Nope. Home prices will fall but not due to interest rate hikes. The Fed has no room to raise rates. The prices will drop because Chinese money is gone and because stock portfolios of retirement accounts, mutual funds have gone bust leaving the bigger fools with nothing BUT their overpriced homes.
And equities have to fall 50% or so before people think they have reached a bottom and might drop even firther.
I expect a 40% correction.
40% correction in what $ price?
Or Gold / Silver
Big differance
"The median of a series is that point which so divides it that half the quantities are on one side, half on the other. "
as the overwhelming number of buyers continue to be high end - the average will move up higher and higher - that doesnt necessarily mean prices are moving up - just different type of housing makeup - need to look at things like ZIP codes and square feet and you will see the bottom of the income ladder is not represented in the average
another false signal the result of Fed policy and WTO loss of jobs
Need moar immigrants.
So...this is GREAT news then, right?!?!
"Don't try to adjust the screen
We are in control of the vertical
And The horizontal
All you see and hear"
Welcome to the central banking elite
Well, with the near 5% existing homes sales drop it looks like the "bad news is good news" market is back again. Anything that is perceived as contributing to hold at ZIRP is a positive after all the disingenuous (comments) from the FED today which need to be offset.
Well everyone and their brother is back watching HGTV about some home flipping crap so I think the top is in.
My in laws had those on the last time we were there.
"Our budget is $500k for purchase and another $50k for renovations."
Ahahahahhahaa this is going to end well yet again. More tears down the front of their stainless appliances splash on their granite counter tops.
pods
It's amazing how easy it is to draw people back into the ponzi.
Doc, you know as well as I that "there has never been a better time to buy a home(mortgage to fuel the debt ponzi).
I laugh because everyone on those shows needs space for "entertaining."
You know they aren't real people. Living their lives "entertaining."
I will write an actual show now for the real world;
"So in this new house we are going to need a basement. Our kids are a bit older now and we need a place where we can banish them to when they are driving us mad.
Oh, and I also hate people so the lot size will have to be large enough where we cannot hear our neighbor pee at night. Our budget is about $75 thousand because we do not want to pay these goddamn bankers any more vig for the right to issue my credit, so we have saved up to purchase. As for counter tops, if there are some that will do fine."
pods
Even with the lowest rates in history the: lack of wage growth, the cost of Obamacare, and student loans have come up against the inflated housing prices.
With the crap economy - prices are going to have to be cut by 40%-50% to move houses in the future even without a rate raise.
When the equities bubble pops, so will housing, or vice-versa. That is why we got no 0.25% rate raise from the FED, because that was the pin that would have pricked either bubble.
Hard to beleive they can prop it up for so long but with EZ Loans and almost no questions asked and zero-down there's a mafket out there. As long as the Taxpayer is forced to back this crap up, lenders will continue to make Bad Loans. They (lenders and RE industry) get the bonuses and commissions, while tapyers get stuck with the losses.
As I'm cleaning up Rubbish this morning at Walmart a good looking young employee driving a new car ask me if she can bum a smoke, I don't have any on me was my reply.
I drive 4 cars all over 12 yrs. old and am debt free. Poor girl is going to have to learn the fine art of body works.
Gold Bitchez.....I pick up pennies
Dear ZH
Please remember you have international readers - be nice if the article included what country is being discussed. I guess it's an exceptional one.