Housing Recovery Horror: New Home Sales Crash Most Since 2013 As Median Price Soars

Tyler Durden's picture

Homebuilders were exuberant, The Fed was confident, and stock markets have recovered... so why did New Home Sales collapse 11.5% in September (missing a 0.6% drop expectation by a proverbial mile)? This is the largest MoM drop since July 2013. Worst still, the excitement of July and August data has been notably revised lower to press the current New Home Sales SAAR to 468k - its lowest since November 2014. At the same time, median home prices surged to $296,900 - the highest in 2015. Time to hike rates?

Biggest MoM drop since July 2013... (and weakest YoY growth +2.0% since Nov 2014)


It seems Homebuilders really don't know anything after all...

Chart: BBG


One possible culprit: the raging housing bubble, as the median new home sales price rises to the highest in 2015 and just why of its all time high at $296,900.


Dragging the SAAR to its lowest since Nov 2014...


Who could have seen that coming? Home Sales collapse as the ongoing bubble push to drive asset prices higher crushes affordability.

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Tin Hat Salesman's picture

Great time to buy a home!

madcows's picture

That dude from Cleveland said starter homes were $45k there.  So, the land of Cleves is giving Detroit a run for their money.  But, I'm also betting you could buy a nice Ghetto Fixer Upper in any POS city for about that much... Newark, St Louis, Baltimore, Cincinatti, Akron.  They're all over the place.

pods's picture

Yeah, and if you like to watch Cops, you don't even need a TV, only a window.


two hoots's picture

Do houses in Las Vegas come with running water or does that have to be trucked in?

PTR's picture

I hear that Detroit residents have first dibs on that water.

johnvallo's picture

Why do realtors always have the worst websites? My guess is all that dreamy find your dream house BS gets to their head and they think that, because they are entrepreneurs and make dreams come true they are somehow authorities on design. All you need to do is look at their tie or website to see that this is blatantly false. And we trust our $1--,000040004s of dollars to these tools. 

johnvallo's picture

Look at him in the mirror with that cheap camera on this shot. What a clown. oh wait he's an authority on photography too - because he makes dreams come true!!!!! Can't even pay someone $50 for good photos (and price it moron). 


Jlasoon's picture

If that new home sales vs median sales price chart is accurate well... That means new homes should be selling for an everage of abut $72,000, which would put gas at about $0.50/gallon, new cars at about $5,000, and high education at about $12.50/credit hour. Sounds about right if you factor in today's income levels. 

Good luck everyone!   

ebworthen's picture

Healthcare premiums going up 17%-40% for my state exchange; not to mention weekly announcements of large career job cuts by major U.S. corporations the past couple of months.  At some point X meets Y.

PlayMoney's picture

Between X and Y there is a mountain of money printing, manipulating and deceiving for the foreseeable future.

Hopeless for Change's picture

And still the Communuslim in Chief tiptoes through the tulips, with his sheeple more adoring than ever.

madcows's picture

With rates this low, there's never been a better time to purchase that dream home!

Viffer's picture

And with only needing what ... 3% down, there is no chance of you ever going underwater with the continuous growth of real estate prices!

Mark Mywords's picture

Not seasonally adjusted, just 36,000 new homes were sold last month. Pa. Thet. Ic.

Only the very wealthy can now afford to build a new home, as of those 36k new homes, 27k came in at a price of over $200k.

No class warfare here. It was won long ago by the group that waged it.

two hoots's picture

A fragmented and compartmentalized economy.  There is no one fix.  The Fed is in a pickle. 


FrankDieter's picture

Baloney - not making sense.  Keep your pie hole shut please

McCormick No. 9's picture

Note to Hillary- be careful what you pray for, you just might get it.

Mick Shrimpton's picture

The problem is land prices.  Where I live, you simply cannot find affordable land to purchase for a new home closer than 45 minutes to an hour from the metro area.  I live a half hour from the metro area and the open 3.5 acre lot next to my house is listed for $80k.

Dead Canary's picture

You know, two or three years from now, these clowns are going to be sitting in the windowless ruin of what was once their home. Huddled around a small fire in the middle of their living room. Cooking what is left of the dog they killed three days ago and say, "You know, I sure wish I'd listened to those guys on Zero Hedge."

RadioFlyer's picture

*Cooking what is left of the small bony child they once called 'Timmy' and say "You know, I sure wish we had more children".


There I fixed that for you.

Not if_ But When's picture

In my town there is by far the greatest amount of "for sale" signs I have ever seen.  Nearly entirely driven by becoming the #8 town in our state for the property tax rate.  But it's a huge problem to sell your house when you are recognized as the #8 property tax rate town in the state.  (Thanks in great part to brand new Lexus SUV-driving dual income professional types who will approve any spending and want the best of everything).

What is not realized by our town "officials" is the great number of under-the-radar homes for sale that the owners gave up actively trying to sell or are curently being temporarily rented.  The house next door was built a few years ago to be sold, got no offers for almost two years despite price reductions, and is now being rented.  (of course, the owner had it way overbuilt with ridiculous amenities, probably figuring he'd nab a professional couple).

So basically - you're f*cked trying to buy, sell, or even exist in a house.  (unless you are one of the elite)

Omen IV's picture

the twin free cash flow problems are rising Property Taxes and lower wages. But it is deeper than that - all kinds of jobs are going from W-2 status to 1099 - as the contingent hiring becomes the norm.

These jobs are inherently unstable, lower annual compensation, cant be easily documented as people take more and more in various entites other than personal accounts to take deductible expenses - all of which impact a mortgage application file.

RE taxes are moving up at double digits which impact sales value as well

The real estate affect is going to be catastrophic very soon - the amount of property to be impacted is staggering - the low rates mask the fundamentals

Banker Buster's picture

So prices up and sales down...Broken fed induced economics.  

Note to fed: this market will break you, not the other way around, you've only distorted it.  Stop trying to break it or the results will be more negative than you can imagine.  Raise rates, let price come back to reality and then and only then will you get a real recovery.  

tommylicious's picture

The horror.  The horror.

taopraxis's picture

Go the BLS website and look at the breakdown of the CPI components and try to find that housing inflation. Housing is strong whenever they're pushing stocks and real estate and weak whenever they're pushing bonds and monetary intervention. My own general view is that housing is weakening while rents are high and rising, however price trends are radically different in different markets rendering aggregate data essentially useless.

I Write Code's picture

When prices soar, buyers are mostly speculators.

Handful of Dust's picture

"There's never been a better time then now to buy a house at twice it's value!"

hawaiianPunch's picture

... and stock market doesn't care

Bam_Man's picture

People are waiting for the Fed to give them negative mortgage rates.

Sequoia's picture

I almost died laughing when I read a similar article on Bloomberg.  They are still trying to blame tight lending standards.  I remember in 1996 my wife and I had been working 2 years and had limited credit history.  We wanted to buy a 140000 dollar home which was a 2500 sqft new home in Hurst Texas.  We had 40000 down and made 100000 a year and were considered subprime at 1X income with over 25% down.  That would cost you 2 extra percent back then.  You also had to cough up 3 years of banking reciepts and W2s before they would even talk to you.  Now its 3% down 580 credit with a recent bankruptsy and they charge and extra .5% and hand you the  pen before you change your mind.  Tight lending standards my arse.

honestann's picture

Anyone who buys a home in the USSA and other large western nations at this point in history is totally insane.  The collapse has begun.