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Existing Home Sales Tumble, Weakest Annual Growth Since January
Dominated by an 8.7% collapse in The West, existing home sales fell 3.4% in October MoM (worse than the 2.7% drop expected) to a 5.36mm SAAR. Year-over-year, existing home sales are up just 3.9% - the weakest since January. And finally, in a mind-numbing reality for The Fed's wealth creation plan, median home prices have now dropped for 4 months in a row.
This is the weakest growth in existing home sales since January..
By region, its extremely mixed...
October existing-home sales in the Northeast were at an annual rate of 760,000, unchanged from September and 8.6 percent above a year ago. The median price in the Northeast was $248,900, which is 1.3 percent above October 2014.
In the Midwest, existing-home sales declined 0.8 percent to an annual rate of 1.30 million in October, but are 8.3 percent above October 2014. The median price in the Midwest was $172,300, up 5.7 percent from a year ago.
Existing-home sales in the South decreased 3.2 percent to an annual rate of 2.14 million in October, but are still 0.5 percent above October 2014. The median price in the South was $188,800, up 6.2 percent from a year ago.
Existing-home sales in the West fell 8.7 percent to an annual rate of 1.16 million in October, but are still 2.7 percent above a year ago. The median price in the West was $319,000, which is 8.0 percent above October 2014.
But overall, home prices have now dropped for the last 4 months in a row...
As the high-end sales shrink...
Lawrence Yun, NAR chief economist, says a sales cooldown in October was likely given the pullback in contract signings the last couple of months.
"New and existing-home supply has struggled to improve so far this fall, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets," he said. "Furthermore, the mixed signals of slowing economic growth and volatility in the financial markets slightly tempered demand and contributed to the decreasing pace of sales."
Adds Yun, "As long as solid job creation continues, a gradual easing of credit standards even with moderately higher mortgage rates should support steady demand and sales continuing to rise above a year ago."
First things first - October saw an epic rally in stocks worldwide; and we thought looiming rate hikes were a) a sign of strength, and b) going to bring forward sales as people rush to buy before it gets too expensive?
Charts: Bloomberg
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It doesn't matter. Stocks UP - Gold DOWN until WW3 happens. Nothing else is going to happen accept for that.
(except NOT accept)
"I'm going to go buy an overpriced home, now that rates are going up."
Let me help you find one. How about any home in Vancouver BC? See how easy it is.
I'm noticing prices of houses with acreage in rural areas within 30-45 min. of State U. town starting to come down to what I'd consider a reasonable level. Which is nice since the idiot I bought from is looking to put his other two lots next to me on the market at insanely stupid prices.
There's never been a better time to kick a realtor in the nuts.
... And yes, some of those bold, brazen, women do have a huge set of nuts...
"There's never been a better time then now to buy a house for thrice its value!"
" GO SHOPPING!!! "
Quick the sheep are starting to notice, lets take some photos of some losers in the streets with black turbans stat! and send it off to all the media outlets and tell them to panic!!!!
3 for 3 in the basement on the economic front today. Existing Home sales, PMI and Chicago Fed all down and we have the Fed in a rushed Monday morning meeting? This better explains the need for a rate hike. This shit is becoming laughable!
Time to revise the Fed Rate Launch odds in Vegas, again. Bad is good. The Costanza effect lives on.
Nothing but “Flippers Mistakes” on the market. Crap Shack Money Pits are just waiting for you to put your name on it. Never mind the $13K in taxes in an area with $80K household income. When your house gets robbed while you’re at work the $120K per year cops will write out the report nice and neat.
yep, saw many of those flippers when home shopping, settled on a 1956 ranch style home in a rural area of the mid-west, locked in 30 year fixed at 3.5%.
House prices have risen way too much the past few years. Home flipping tv shows are all back. Property taxes are rising well above inflation rates. Healthcare costs are skyrocketing.
There is only so much money available when wages don't keep up.
I know a guy who just sunk a bunch of money into flipping his first house. He said yesterday the buyer lost financing and it is back on the market. Hope he gets out in time otherwise he's going to be completely reamed.
My property taxes are set to rise 37% in 2016. WTF
tax or valuation. thats revolt material, a hike like that. And there should have been a vote on that.
You will of course be challenging that...
They are not buying homes in the West because they are building millions of apartments and moving into those.
yep un stack and pack sustainable living cubicles next to the train.
No property for U!
What???
The pimps in purple robes at the National Association of Realtors say it's time to buy.
They always do.
"As long as solid job growth continues"...
At some point, 2 & 2 will come together and this ruse of rising employment being conflated with rising home sales/prices, will shatter. No one can purchase a home in today's market on a 'Leisure & hospitality' or other 'service-sector' job. The chattering financial classes are hiding behind this rubric because the fakery has yet to be 'called'.
And 30 hours max a week.....
Dp
Bullish.
I really do have to agree with everyone else how laughable a farce this has all become.
Looks like MOPE is failing!!! https://www.youtube.com/watch?v=Fnpsi8Q1tH8
The Feral Reserve ain't raising rates.
I used to sell real estate in a former life (1976). A couple rules of thumb, IIRC, were
20% down - this is always a reasonable proposition, but, in today's upside-down, debt-soaked world,, 3% is accepted by Fannie and Freddie, so, OK, sure (not).
Total price of home should not be more than 2 1/2 times annual income. - Median household income is right around $48K, right, so 2 1/2 x is 48+48+24=$120,000 NOT $200,000.
Monthly PITI less than 25% of gross - Again, median at $48k, it's $4k a month, so, $1000 for PITI. I always thought the number should be based on take-home, since the government takes a hefty share of gross.
Anyhow, PI on a 200,000 home with 20% down (20K - nobody - maybe 10% of potential homebuyers has this much saved), a 160,000 mortgage is $764. That leaves $236 for insurance and taxes. Good luck insuring a 200K home for anything under $800, and taxes, well, I live in NY, so, there's a huge disincentive, because property tax on a 200,000 home would be about 10K, or $833 a month. BZZT! FAIL!
If you can find that mythical $200K home in a jurisdiction that will only tax you $2400 a year, you are blessed, uh, if you have $20K in your bank, and can prove your funds were not borrowed, stolen, etc., and if you have a steady job, and a credit score over 735 (10% of working people) and you kiss the banker's balls gently.
There are so many pitfalls to home-buying these days, the banks are DQing anybody who is not perfect. The house next door to my property (which is 5.6 acres with no house) is overpriced at $118000 - was $135K, then 125K, and its been for sale for three years, with taxes of $4500 a year, so the owners are getting severely hosed since they didn't price it propely to begin with. Supposedly, a single guy, 40s, veteran, bought it in late September. Supposed to close in October. The town made the owners put in a $10,000 septic system because - I love this - the one that was there, 500 gallons, which worked for over 80 years without issue, was now, in 2015, inadequate, and they needed 1000 gallons.
The FOR SALE sign is still in front of the house and nobody has moved in. It's November 23. FAIL. The owners have spent $13,500 in taxes and $10,000 for a septic system AND THEY STILL HAVEN'T SOLD IT. I would sue the bank and the town for unnecessary improvement, or just kill myself for not pricing the fucker at $89K to begin with. Greedy asshats, getting screwed.
Edit: If the guy does get the house, I suspect his carrying cost is going to be close to $1000 a month. I have been told he works at NAPA (retail). How much can he make, even if he's a manager? $45k, $35K? I figure on having a good chance of buying the place in 2-3 years after he defaults and the bank forecloses.
BUY SILVER. It's on sale!