Pending Home Sales Miss, Decline For Third Month; NAR Criticizes Flawed Monetary Policy As Culprit

Tyler Durden's picture

With actual economic data now largely irrelevant, and why should it be : "got a recession? There's an EFSF for that" it is hardly worth noting that the third notable economic data point of the day, the first being GDP which came in line on an inexplicable surge in consumer spending in Q3 despite an epic collapse in consumer confidence, and a drop in the market to 2011 lows; the second being the nth consecutive print in initial claims over 400, which was the pending home sales update from the NAR which printed at -4.6% on expectations of an increase of 0.4%, and down from last month's -1.2%. This is the third consecutive monthly slide in sales data, and merely adds to yesterday's near record drop in median home prices, once again simply confirming that the biggest source of US "wealth" housing still has a long way to drop. And while we ridicule him all the time, even the NAR's Larry Yun has figured out that operation twist and monetary policy in general is a failure: "The Federal Reserve evidently has been attempting to lower mortgage rates, yet more consumers are faced with taking out jumbo loans that carry higher interest rates." Speaking of Jumbo loans, PrimeX jumped earlier today on the European news, and has since been drifting lower. It will continue doing so once some semblance of rationality returns.

From the NAR, which already has zero credibility to begin with and its upward bias has been documented on repeated occasions:

Lawrence Yun, NAR chief economist, said the housing market is being excessively constrained. “A combination of weak consumer confidence and continuing tight lending criteria held back home buyers, even though the private sector added nearly 2 million net new jobs in the past 12 months,” he said.


The PHSI in the Northeast declined 4.7 percent to 60.6 in September but is 4.0 percent above a year ago. In the Midwest the index dropped 6.2 percent to 71.5 in September but remains 12.3 percent higher than September 2010. Pending home sales in the South fell 5.5 percent in September to an index of 91.6 but are 5.0 percent above a year ago. In the West the index declined 2.1 percent to 105.8 in September but is 5.6 percent higher than September 2010.

Hilariously, even Larry Yun is now criticizing the Fed:

America’s monetary policy is contradictory and confusing, where some consumers with the best financial capacity and top-notch credit scores pay higher mortgage interest rates,” Yun said. “The Federal Reserve evidently has been attempting to lower mortgage rates, yet more consumers are faced with taking out jumbo loans that carry higher interest rates.”


Yun emphasized the need to reinstate higher loan limits in 42 states. “Just leaving excessive cash to sit in banks and not work into the economy is a drag on the overall recovery,” he said. “We need a comprehensive approach to address housing issues – not additional impediments.”

And with that observation of reality, we return you to today's continuing EURUSD and ES short squeeze.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Cognitive Dissonance's picture

Missed it by  >            that            <  much.


Oh regional Indian's picture

Hey CD, which bush have you been hiding under, eh?

And that, is really flexible. That can be stretched, shrunk, bloated, sugar-coated.

What a scary thought, someone said:

This housing collapse has no floor.


Nuclear Anniversaries Omens and other things

MillionDollarBonus_'s picture

Flawed monetary policy is certainly a culprit for this disappointing figure. Dr Bernanke has become decidedly hawkish as of late, and to be frank he has failed to deliver the necessary level of MBS monetization. But that's not to say that congress shouldn't be looking for ways to increase aggregate demand through further fiscal stimulus programs such as HARP. And lastly, we are all to blame somewhat for America's poor consumer spending figures. Each and every one of us has a responsibility to boost aggregate demand by spending and taking out more consumer loans. If every American just spent an extra $1000, this would account for a total boost in aggregate demand of $312,454,000,000! Come on America, we can do this - I KNOW we can.

Mohan's picture

Sorry pal - no offense. This is the kind of econo-gibberish (aggregate demand, MBS monetization, fiscal stimulus, yada yada) that brought this great economy to its current state of distress. The economy did just great in the 50s through mid 70s when know-it-all economists were just formulating their voodoo theories and the yet to be born new-breed financiers were still in their mother's wombs contemplating the explosive financial "instruments."

A good economy needs more engineers, inventors, scientists, true entrepreneurs. Not fake professionals who call themselves economists and spoiled brats with Ivy MBA Finance degrees who think that the world owes them bazillion dollars 'cause they are smart.

Here is something I will say in simple English to all the gullible  who keep believeing the bullshit by the Feds, Governmentsand the Econoclowns: The sound economic policy for any economy is not to interfere with business cycles and/or cost of capital.


MillionDollarBonus_'s picture

"The sound economic policy for any economy is not to interfere with business cycles and/or cost of capital."

This is a purist/extremist view. The world is not black and white - it comes in shades of grey. You have to accept the value of fiscal and monetary stimulus or else you are simply an extremist.

eureka's picture

Here's some "shades" for you:

"Jumbo Loans" - means that the rich  and or aspiringh rich are busy gobbling up McMAnsions at pennies in the dollar.

They're gonna feel really good about themselves; at least they'll be watching the crash of US Paper-Financial Empire from a premium seat - until the "mansion" goes on fire.

FeetOnTheGround's picture

Shades of gray ARE black and white.

s2man's picture

Im doing my part; converting every FRN I can into physical assets.  Short $, long stuff.

curbyourrisk's picture

You are a tool of the BERNANK.


People like you are part of the problem.. I bet you would like to give the world a can of coke too, then hold hands around the camp fire and sing kum-bay-ah.

chubbar's picture

I keep reading where the analysts believe this price drop will stop at 1996 pricing. I built a house in 1996 and sold it in 2005. The price according to Zillow (not sure how accurate they are) has it BELOW the amount I spent to build it back in 96', and I did a pretty decent job of keeping the cost down.

Cognitive Dissonance's picture

'Hey CD, which bush have you been hiding under, eh?'

I will be posting a new article today called "Breaking Broken Connections." 

Oh regional Indian's picture

Nice, very apt under these Scorpionic, Samahain-y, day of the dead-y times.

Thin veil and all. look forward to reading it.


philipat's picture

NAR Spokesperson:

"Look, let's totally ignore reality and seasonality. We're here as a chearleader. Sales were up month over month, which, of course, they always are at this time of year. The fact that they are down YOY, which factors seasonality? Oh fuck that, this is sales promotion and most readers are too fucking stupid to have any understanding of basic mathematics. Etc Etc."


Tsar Pointless's picture

Let's see.

Dazzling with brilliance was jettisoned long ago.

Now, baffling with bullshit isn't even working.

What now?

Poule Mouillee's picture

Spin it with Spirit?

Flog it with Fervor?


Devore's picture

Brilliance > bullshit > lies.

homersimpson's picture

Looks like this is bullish.. 240+ and counting.

MFL8240's picture

Everthing is bullish when the whole sytem is based upon bullshit.

s2man's picture

Got bullshit?  You'll need it for your garden.

alien-IQ's picture

Consumer confidence plummeting is a sign that Banks (and the FED) are doing their job spectacularly since it is their goal to break the morale and spirit of the general population.

The decline in home sales is just a small part of it.

If the government wanted the consumer to feel more confident, all they would have to do is remove the government dick from the consumers ass and I'm certain they will feel much much better.

Waterfallsparkles's picture

Really does not matter how low interest rates are if the Banks will not lend to anyone.  Their so called credit standards are now way too high.

It also does not matter how low interest rates are if the House will not Appraise.  Now the Appraisal process is being run by the Banks.

The Banks dumping propertys on the Market way below Market Value almost guarantees that a House sold by an individual will not Appraise.

disabledvet's picture

whatdaymean? they give Government money for free? I don't understand. Nice kitty-cat btw. what's his name?

Waterfallsparkles's picture

Senoria short for Senorita.  My Cat is a little Girl.  When she was a kitten her face markings looked like a French Man with a little mustash and a gotee.  I could not call her Sinor so I named her Senorita.

She is a real little devil too.  With a real personality. So cute.

NumNutt's picture

Your partially correct, the credit standards have increased because the government passed new regulation after bailing the banks out the first time around. They now are requiring the 20% down to help keep people from walking away from their homes. One of the new regulations also is that in the past a bank could pick who they wanted to perform an appraisal, now the new federal regulations require that the government picks at random a local appraisor to perform it. This is to stop any appraisals being given with a false value to make the loan go thru.  In the governments view these new regulations are to keep another housing bubble from occuring, the reality is they have killed the market.  Your comment of the banks dumping foreclosed properties on the market at below market value is also a mojor issue that continues to drive all the values down.....and down we will continue to go.

FunkyMonkeyBoy's picture

Will the FED ever pay for it's crimes?

Hephasteus's picture

No. But they'll print people permission slips to pay on their behalf.

Unprepared's picture

That's why I rather believe in Hell

fuu's picture

The $100 down 203k's will fix this by the next reporting period...

RobotTrader's picture

The  Comfort Index is the worst of all time and housing is still in the tank.

Nothing has been fixed to create jobs.

However, the time to buy stocks is when the news is the worst and people are exiting mutual funds in droves with multi-week withdrawals.

The fact that the SPY is down a paltry 7% from the highs during the worst economy in 75 years is proof that the market is acting strong.

Just watch what happens when things actually improve and all that bond money starts piling back into stocks and we get 40 consecutive weeks of mutual fund inflows.


jcaz's picture

Yeah, that will save your 3 shares of Netflix.....

Mr Lennon Hendrix's picture

Holding dollars instead?

Robo is right to a certain extent, but of course Robo does not tell the whole picture......

Hohum's picture


I know it's your schtick, but when things improve the price of oil will climb up and nip any nascent recovery in the bud.  That includes recovery in the "market."

Mr Lennon Hendrix's picture

In a real environment, yes.  With Bernanke printing trillions of dollars, well, inflation may take oil higher than ever before, but stocks will also be more expensive.

earleflorida's picture

oil is a fossil fuel, thus it's prehistoric, period -

what use oil has in the future is but its  derivative by-products providing limited usefulness soon to be a 19th century footnote in the industrial history books via 21st century! 

FunkyMonkeyBoy's picture

... or, more likely, the stock market catches up with physical/economic reality.

The FED has been trying to wag the dog that is all...

... they failed, and it has cost $trillions...

... now every member of the FED should be hung for treason, very simple really.

... and then we come up with a new fair system for the people, that hasn't been hijacked by Jewish interests.

disabledvet's picture

very odd. the best performing financial asset ytd is treasury debt. the worst is high yield corporate. needless to say what Europe has done is not pro-business. yet the market rallies. sounds like questions to me. here's a famous one:

alien-IQ's picture

You remind me of a character in the Charles Bukowski poem "My Friend William";

my friend William is a fortunate man:
he lacks the imagination to suffer

he kept his first job
his first wife

can drive a car 50,000 miles
without a brake job

he dances like a swan
and has the prettiest blankest eyes
this side of El Paso

his garden is a paradise
the heels of his shoes are always level
and his handshake is firm

people love him

when my friend William dies
it will hardly be from madness or cancer

he'll walk right past the devil
and into heaven

you'll see him at the party tonight
over his martini

blissful and delightful
as some guy
fucks his wife in the

Charles Bukowski

Mae Kadoodie's picture

Robot, unless you are, like, 15 years old, your "LOL" useage priveledge has just been terminated.

monopoly's picture

Market appears stalled here just like housing. What a train wreck.

OutLookingIn's picture

The NAR 'spins' bullshit!

Talk about a conflict of interest, the NAR would like nothing better, than to return to full speed ahead and damn the financial torpedoes!

The housing sector and some aspects of the CRE market have many years of devaluation to look forward to yet. This is the two edged financial sword that deflates asset values and inflates consumer base goods. While at the same time diminishes your take home pay, for those that still have a job.

Can you say stagflation? I knew you could!

snowball777's picture

Sure, Larry. We'll just have some mythical buyers suddenly decide to buy "more" house. LOL

Debt deflation spiral. There is no up.

MFL8240's picture

Consumer confident is down, unemployment is terrible, housing is terrrible, and the GDP is up because unemployed people are spending money buying Chinesse made goods!  hahahahahahaha!!  Sure.

jdelano's picture

in six to eight months, today's GDP number will be revised down to -0.4

earleflorida's picture

the other day i heard some brainiac economist or whatever on the financial networks speak of chinese imported goods and products as a saving grace for the unemployed, and no-where to-go off-shored job market here in america -

[sic] if they didn't have low cost products from china their plight would be much worse,... that china is helping their purchacing power with (excuse me for saying this,... if american jobs weren't offshored in the first place there would be no need for this recourse by the way, stupid me?) these hard times regrettably falling upon the U.S. labor force,... should be comforting to them, while they [emphasis THEY] ,'bask-n-a-jobless-recovery, and a future-of austerity', while the U.S burns it's Phoenix! 

marcusfenix's picture

today marks the single largest and most profound disconnect and decoupling from reality I have personally ever witnessed in the markets, so much so I don't think they will ever be able to find the rabbit hole again and are doomed to wander in wonderland forever. to mark this absurdly surreal return to the jobless, house-less recovery a little queensrych-

I've got to do something
about the loathsome
state I'm in.


Everywhere I see decay.
Mechanized and sterilized
visions of replay.
I must release my rage.

feeling so...

D ow n.........

Maybe all I need
beside my pills
and the surgery
is a new metaphor for reality.

I'm...DiS CoN NeC TeD
feeling so...

- you know -

MFL8240's picture

Could not agree more!  Money printing now equals growth.

Undecided's picture

Every paper is preachng how nice it is that the U.S. has growth today...I guess they just don't understand how inflation works anymore...alot of people going to get hurt.

Bansters-in-my- feces's picture

Well don't worry the "markets"have no eyes and no ears.


They seem to think a trillion dollar levereged BAILOUT is a good thing.