Existing Home Sales Surge To Feb 2007 Highs Before Yuuge Spike In Mortgage Rates

Tyler Durden's picture

October saw exisitng home sales (SAAR) surge to 5.60mm (handily better than the 5.44mm expectation). These are deals essentially done in August and September - weeks before mortgage rates exploded higher - and with median home prices hitting new highs as the cost of funding spikes, it is hard to se how this is sustainable.

What happens next?

The 2013 taper tantrum spike in mortgage rates created a 10% plunge in existing home sales in the following 4 months.

Lawrence Yun, NAR chief economist, says the wave of sales activity the last two months represents a convincing autumn revival for the housing market.

"October's strong sales gain was widespread throughout the country and can be attributed to the release of the unrealized pent-up demand that held back many would-be buyers over the summer because of tight supply," he said. "Buyers are having more success lately despite low inventory and prices that continue to swiftly rise above incomes.


"The good news is that the tightening labor market is beginning to push up wages and the economy has lately shown signs of greater expansion. These two factors and low mortgage rates have kept buyer interest at an elevated level so far this fall.


"The ramp-up in housing starts in October is a hopeful sign that overall supply can steadily increase enough to provide more choices for buyers and also moderate price growth," said Yun. "A prolonged continuation of the robust single-family starts pace seen last month (869,000) would go a long way in giving homeowners much-needed assurance that they can list their home for sale and find a new home to buy within a reasonable timeframe."

Well those "low mortgage rates" just evaporated!!!

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SomethingSomethingDarkSide's picture

Can't hear you *fingers in ears* ALL TIME HIGH'S!

Fizzy Head's picture

All time highs like 2007?

Hmm, what else happend in 2007... oh yeah millions of people lost their houses during the bubble pop. Better get in or else you may not get a chance to buy a house when they are 400k average...  We are in a rinse and repeat cycle.

adr's picture



"October's strong sales gain was widespread throughout the country and can be attributed to the release of the unrealized pent-up demand"

Levels of bullshit that could power Elon Musk's imaginary Mars rocket.

Life of Illusion's picture




Nunyadambizness's picture

And his imaginarily profitable Tesla automobile manufacturing company.

ParkAveFlasher's picture

The NAR just loves it when people rush the deal...no transitional housing, no renting, no family move-in, just "GAAAH GOTTA BUY OR I'M HOMELESS"

I can't stand the NAR.  They serve absolutely no function but to enrich themselves as value-subtracting middlemen.  Why they haven't been obsoleted by digital classifieds is beyond me, but it might have something to do with goosing the demand for debt via fixing fees atop the pricing mechanism of the housing market.

Whatever, I moved my kids to homeschooling to give myself flexibility in housing transitions (and for many other reasons, not the least is to avoid the sheeple-ization that occurs in the NYC system).  My goal is make myself immune to the September market choke at the hands of the NAR, telling old people to hold off on Florida, why not take a second mortgage out until prices are better?  I don't wish hell on anybody in this world, everyone has to eat.  But I do wonder what justice is, sometimes.

bada boom's picture

Never heard a realtor say "now is not a good time to buy a house."

Fizzy Head's picture

Cuz if they can't lie with a straight face, they wouldnt be in sales.

Pigeon's picture

You mean that "tightening labor market" of 3-job workers sucking up those lucrative holiday checker jobs at Wal-Mart? Yeah, that's going to support a family and mortgage on a $250k house

buzzsaw99's picture

maybe veteran bond traders should ask first time home buyers what rates will do. it's uncanny. perhaps a simple survey as to what percentage lock in their mortgage rate.

ThisUsernameFollowsTheRules's picture

Mortgage rates rising may temporarily lower prices, but only long enough to make them a slight bargain for the hedge funds to suck up. Imagine 30 years from now if all jobs paid minimum wage and corporations owned/rented out all the houses. It would be their dream scenario of permanently locking the population into debt servitude. An avg shitty house might cost a million dollars while jobs paid 15$-20$ per hour. No normal person would ever be able to purchase a house again. There's a limited number of houses and land, but an unlimited supply of money. Eventually this will happen. How does every game of Monopoly end?

King Tut's picture

Limited land? Have you ever driven from Indiana to Iowa on Rt80?

highwaytoserfdom's picture


So I guess the FED gets more MBS paper and our creditor China gets GMO beans..

What can go wrong with house as an investment?     Nothing here going back to sleep.... 

nakki's picture

Its never been a better time to make shit up for a living. Seasonally adjusted, Non GAAP, legalized fraud, fraudulent world is the new norm. 

The problem is where do you go from here. A Ponzi Ponzi?

YellenTheft's picture

Poor bears just keep getting slammed everyday. That crash has been postponed even longer now :D

King Tut's picture
King Tut (not verified) YellenTheft Nov 22, 2016 11:38 AM

There are no bears

HRH of Aquitaine's picture
HRH of Aquitaine (not verified) Nov 22, 2016 11:46 AM

I don't see a problem. So what if rates have gone up? That is good. Rates have been kept artificially low for far too long. House prices may go down ten percent or stay level and I don't see that as a problem either.

FreedomGuy's picture

Data are data. The interpretation of the data is the key. You generally have to put them all together and make a call  if you are an investor or buyer. They can spike because of interest rate expectations, appreciation expections, sudden job and income gains, money hiding from other countries, etc.

if you are a real estate agent there are only two predicitions: 1. Real estate is going up. 2. Real estate is about to go up. You know that going in. Over time they tend to be right. You just don't want to be the 2008 buyer. If you are buying long term to live in it, the risk is lower. If you move every three years then you have a different choice.

If you are an investor...well, compile more data and pick your investment timeline.

Muppet's picture

Why is ZH covering NAR findings? The NAR is the single most biased reporting organization. There should at least be a large disclaimer or notice that precedes any NAR data. These numbers are nothing more than hype and manufactured.