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Pending Home Sales Another Miss
The NAR just reported that pending home sales, yet another metric of that long-forgotten housing market, dropped 1.3% in July, on expectations of -1.0%, and down from 2.4% in June. Market reaction is none, because this metric does not matter: all that matters is who and what else petrodollars can bail out next. From the report: "The Pending Home Sales Index,* a forward-looking indicator based on contract signings, slipped 1.3 percent to 89.7 in July from 90.9 in June but is 14.4 percent above the 78.4 index in July 2010. The data reflects contracts but not closings." And the soundbite from the always hilarious and massively discredited and conflicted Larry Yun: "The market can easily move into a healthy expansion if mortgage underwriting standards return to normalcy,” he said. “We also need to be mindful that not all sales contracts are leading to closed existing-home sales. Other market frictions need to be addressed, such as assuring that proper comparables are used in appraisal valuations, and streamlining the short sales process." Ah yes, mortgage underwriting standards, in other words if banks were to actually do something about mortgage that are delinquent by nearly 2 years. Those standards?
More amusement from the NAR:
The PHSI in the Northeast declined 2.0 percent to 67.5 in July but is 9.7 percent above July 2010. In the Midwest the index slipped 0.8 percent to 79.1 in July but is 18.8 percent above a year ago. Pending home sales in the South fell 4.8 percent to an index of 94.4 but are 9.5 percent higher than July 2010. In the West the index rose 3.6 percent to 110.8 in July and is 20.6 percent above a year ago.
“Looking at pending home sales over a longer span, contract activity over the past three months is fairly comparable to the first three months of the year, and well above the low seen in April,” Yun said. “The underlying factors for improving sales are developing, such as rising rents, record high affordability conditions and investors buying real estate as a future inflation hedge. It is now a question of lending standards and consumers having the necessary confidence to enter the market.”
So... this miss is good news Got it.
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If banks would just back to no doc no down loans everything would be fine!
I agree. A fake economy is better than a correcting economy. Wouldn't want to keep it real.
Anyone who thinks that it may be a good time to buy housing from the old addage "buy when everyone else is selling and when prices are depressed" will be taken to the cleaners because prices will NEVER recover. We are watching in real time the unfolding of a failed fractional banking system. Prices and value aren't coming back..... the line of fools willing to bid up your 4-corners ain't no more.
Housing is finished. It will revert back to a place where you live, raise a family, enjoy get-togethers, and use as shelter. Gone are the days of houses viewed as a commodity and a tool for speculative flipping. The line of fools willing to pay you more than what you paid, only because of easy credit, are gone. Thank God.
well said
I heard a guy on the radio describing how now is NOT the time to buy a house. He described how people actually don't buy a house, they buy a mortgage and get a house. It is the payment that determines where they move.
When rates rise people's ability to pay drops in proportion to the rise, so your house drops to reflect this new reality.
So housing will stay depressed due to people NOT buying due to low rates.
pods
Very good. I would only add one point. The hosuing market will be followed by the stock market. This stock market is an outright sham and anyone investing at these nosebleed levels will be wiped out by these gansters.
Larry Yun: Every outfit has its PR pinata.
Ole, Larry.
Lawrence Yun is the "Baghdad Bob" of the NAR. He is, of course, a professional economist/hack!
I think in the future if you have an economics degree you should also be allowed to practice as a licensed witch doctor as well, as the two professions are barely distinguishable.
Yea. Are we talking about the normalcy that allowed Countrywide to write a $400k refi mortgage to a Post Office Clerk /Single Mom in Bakersfield, CA making $30k year on a house she bought for $60k ten years before? I still don’t know if that would get the housing market back up to prior price levels. Maybe if the unemployment rate also dropped to 1%, salaries grew at twice the rate of corporate profits, and the cost of food, gas, and healthcare declined we would get back to that normalcy. Keep dreaming Larry Yun.
bac should tap the illegal immigrant market, they have all the money!
Buzz you must not be aware that they already do that! or were you being sarcastic? You do know that illegals working in the USA can get an ITIN or TIN from the IRS that way they can file their taxes at the end of the year and take advantage of the generous gift from the IRS otherwise known as the EIC Earn income credit, even though they are here illegally. They also will open an account with BAC using their TIN or ITIN number. Bank of America actively recruits them.
I know of one local BOFA "banking specialist" here in NC that will help illegals fill out their paperwork to obtain a TIN number from the IRS, so they can openan account with BOFA.
They aren't going to be "illegals" much longer anyway. The Cock Sucker in Chief just decided that since he couldn't get his Dream Act passed legally (over 70% of the population opposed it), he'd just go ahead and make it an executive order. Don't worry though, only the "law abiding" law breakers are being offered the amnesty.
"
get a free house with every account. (illegals only need apply)
I suppose it's possible to create an illegal alien alter ego simply by claiming you're an illegal alien to the IRS, DMV, DOE, etc. Who would know? The requirements to prove your illegal-ness are zilch.
How does Skynet process this going forward? It likes the hint of QE3, but for QE3, stocks have to drop substantially and the Dollar Index needs to rise into the high 80s. So negative economic indicators should be bullish for QE3, but the very response to that removes the license for Bernanke to print.
Carrot on a stick market, the carrot of QE will always be held out front just out of reach, but never be delivered. Bernanke loves having it both ways.
Because of course bank balance sheets are really in need of more exposure to consumer credit backed by falling asset values. Gotcha.
Rally ON
XHB pinned at the highs of the day, totally unfazed by this news.
They love the homebuilding stocks today. Nobody wants to be the chump that missed the v-bottom.
Be a pal and go join Leo.
"totally unfazed" ...reality does have that effect on you
As long as AAPL is soaring who cares
BTFD says the Chair Satan
McDonald's at 52-week highs.
No mortgage payments = unlimited budget for 99 cent McDoubles.
Feast on worthless chemical McDeath burgers LMAO!
And everyone wonders why the kids are retarded and 2x overweight, just like their parents eating at McCrap Burger 3x a day.
*Disclaimer: May cause leakage and extreme obesity.
Yea sure things suck right now....but thats just further proof things are guaranteed to be far better real soon!
Anecdotal. Neighbor of mine had house up for sale last year for about 18 months.
He cut the price twice to the number recommended by agent. He had about 35 showings.
He "sold" the house. Twice. Month or two apart. Two purchase contracts signed.
Neither closed. Cancelled enroute to closing, and neither agreement even reached the stage of bank appraisal. They cancelled after about 48 hrs past agreement signing via inspection clause (with no inspection having yet taken place). The buyers just decided they could get a better deal and had made an error and should wait longer for more price declines.
My buddy considered legal action or keeping earnest money, but legal fees would have exceeded any possible reward. Buyers can always find ways out. They can pick a bank they know will refuse them.
So he's still in his house. But twice last year he was a "pending home sale".
Here, at least, you can't even get people to put any earnest money down... or something totally irrelevant like $500 on a $200k house...
Why wouldn't your neighbor just keep the earnest money? That's what it's there for...
I'd suggest dumping the R/E agent and knocking 6% off the sales price... net is the same to your neighbor, but it might be enough to lure in that one sucker. Or, alternatively, keep the sales price the same, but pay all the buyer's closing costs w/ the 6% (much more common).
Where's "Creamer" ? He shud be yelling "housing markets have bottomed!!!". Oh, he did that already a few yrs back. My bad.
He still screams it about once a month.
Looks like the Peak-cramers are having the final laugh..
Took my mandatory stop loss (2% of capital) at 1089 (S&P500). Thought my short from Friday(1080) was a good entry. Wrong again! Rally On.... bullish housing data btw <sarc>
Ber-shankie wins again. Has markets on marionette strings. "Despite all our (ZH) rage we are still just rats in a cage"
Hate it....but I'm losing REAL money.
People think the game is the game itself. Wrong. This is only buying a bit of time for the coming planned event. Youll see.
Don't play their game. The long term view at ZH has been 100% right. And profitable. Would you rather be right for a day or for the big changes ahead?
I'd rather be right for the big changes ahead, but they could take 20 or 30 years to unfold. Seriously, every time anyone thinks "the gig is up; the Fed is out of tricks and tools," they produce a new tool. The fed is limited in what it can do only by its imagination and the multitudes that believe in the system and the currency, while our conclusions at ZH seem based in logic (and, therefore, disadvantaged). It's twisted, to say the least.
No country has ever run an economy for any amount of time, where 40% of spending was raised through debt issues. In fact, hyperinflation has very often kicked in, when the debt issues have been financed through monetization (Peter Bernholz; Monetary Regimes and Inflation).
Yet, somehow "this time is different". It isn't, and all the normalcy bias on display won't change the inevitable one bit.
Won't be long before a 'foreign owned entity' owns your home, your 401K and pension, and your business loans. That's the pattern. Already the NY stock market is mostly in Berlin. And troubled Euro banks are being bailed and controled by those with actual credit worthiness. It was inevitable.
Same as the Weimar Republic, the banks bankrupted everyone and took their homes, then generously offered to rent them back. Its all right there in the LA Times article this morning.
"Other market frictions need to be addressed,"
I was getting worried about the economy but I'm pleased to find out its only a bit of 'friction', it sounds minor and fixable with a few basic policy changes. More seriously, if these guys spent as much time on actual research as they do reading a thesaurus and trying to control the message (and spin) maybe we wouldn't be in such a mess.
"The market can easily move into a healthy expansion if mortgage underwriting standards return to normalcy,”
Yes, if banks start lending to anyone who can fog a mirror again.
What an asshole.
All we need is a return to the good ol days of normalcy 'no job, no income, no collateral' loans and all is well!
The monetary revolution will not be televised. You need ¡SilverRevolución!
http://www.silverrevolucion.com/
It's funny if it wasn't sad. They are waiting for a settlement, then they'll foreclose. Right now they can lose, thus wait for the work of our bought gov't to paper everything over. Once they do that, they'll start foreclosures in grand style.
If our gov't gives these banks millions of free loans....it'll just be par for the course.
Impeach and throw the bums out
Glass-Steagall
Ah yes, mortgage underwriting standards, in other words if banks were to actually do something about mortgage that are delinquent by nearly 2 years. Those standards?
pretty funny
There are some interesting points in time therein article but I don’t know if I see all of them heart to middle . There is some validity but I will take hold judgement until I look into it further. Good article , thanks and we want more! Added to FeedBurner also.
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