• Knave Dave
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    This past Thursday marked the one-year anniversary of the US stock market’s death when stocks saw their last high. Market bulls have spent a year looking like the walking dead. They’ve...

Point Out The Housing Recovery On This Chart

Tyler Durden's picture


No this is not a trick question... well maybe a little. Minutes ago the National Association of Home Builders announced that its Housing Market index soared from 25 to 29, trouncing not only expectations of a 26 print, but just like the Empire Fed, the highest forecast. This was supposedly the highest since May 2007. In other words, everyone is confident, and the commentary is that this print is "reinforcing optimism that the housing market is finding a bottom" and that "this consistency suggests that the housing market is moving toward more sustainable growth." That at least is the spin. Below we show the reality, in the form of the Mortgage Brokers' Association mortgage applications index. We somehow fail to see just where the onslaught of demand for new home loans is, and just where all this optimism comes from.

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Wed, 02/15/2012 - 11:20 | 2161741 LawsofPhysics
LawsofPhysics's picture

FAIL (or everyone is making 100% cash purchases).

Wed, 02/15/2012 - 11:22 | 2161762 HoofHearted
HoofHearted's picture

Failing to smoke the hopium, you terrorist ZHers.

And as my undergrads have now taught me... #FAIL


Wed, 02/15/2012 - 11:33 | 2161853 redpill
redpill's picture

There won't be a housing recovery until 2015.  However keep in mind this data is just homebuilder sentinment, and these home builders have literally been on deaths door for years, the smallest incremental improvement gets them excited.  Plus, typically they get more optimistic at the beginning of the year because spring selling season is right around the corner.  If volumes are up year-over-year, even minorly, expect this dataset to continue to go up.  Based on the early 2012 data, things look very slightly better than 2011 (which isn't saying much) so that's what's driving this.

Conversely if at any point sales volumes go negative relative to 2011, this data will immediately plunge again.

Wed, 02/15/2012 - 11:42 | 2161869 xtop23
xtop23's picture

 Amazing you were able to give the exact year of the housing recovery.

 Housing isnt going to recover for quite some time.

 2015 is optimistic.

Wed, 02/15/2012 - 11:47 | 2161934 Don Birnam
Wed, 02/15/2012 - 13:15 | 2162358 Jumbotron
Jumbotron's picture

Plenty of these green shoots here in Florida !





Wed, 02/15/2012 - 13:40 | 2162484 Triggernometry
Triggernometry's picture

100% cash purchases? By the time one finished counting the cash it wouldn't be enough.

Wed, 02/15/2012 - 13:44 | 2162502 ShankyS
ShankyS's picture

Maybe when Niburu passes in 2012 ... nah better not go there <sarc>

Wed, 02/15/2012 - 11:55 | 2161969 redpill
redpill's picture

It's not that amazing, it's just an estimate based on a mathematical calculation of how long it's likely to take to absorb distressed inventory so that home values can start catching up to inflation again.

Wed, 02/15/2012 - 12:03 | 2162002 xtop23
xtop23's picture

Understood. I would just say , that it is more than likely , the values used to project absorbtion in housing supply are a work of fantasy.

The amount of "massaged" numbers out there indicating current value and trends is staggering.

Wed, 02/15/2012 - 12:07 | 2162017 redpill
redpill's picture

I concur.  I just happened to have real numbers :)


Wed, 02/15/2012 - 12:11 | 2162037 Silver Dreamer
Silver Dreamer's picture

We may have a housing "recovery," but it will be from the government owning them all.

Wed, 02/15/2012 - 12:14 | 2162062 redpill
redpill's picture

They already do, the share of Fannie/Freddie backed mortgages is nearing 100%

Wed, 02/15/2012 - 12:25 | 2162117 Silver Dreamer
Silver Dreamer's picture

Yes, that's the plan and has been for a while.  We are slowly being turned back into serfs both behind the scenes and openly.  Sure, we'll lower your payment, forgive the underwater amount, etc.  In exchange however, you'll simply never pay down the principle and basically be a renter from now on.

Wed, 02/15/2012 - 12:31 | 2162156 smithcreek
smithcreek's picture

One thing to remember about homebuilder confidence is lots, I mean a huge percentage of homebuilders are gone, so of the ones that are left, many do have better prospects.  Just like people falling off extended unemployment brings down the unemployment number, home builders getting out of the business boosts this index.

Wed, 02/15/2012 - 12:45 | 2162129 TruthInSunshine
TruthInSunshine's picture

Is there a human alive with an IQ above 100 and who is at least non semi-comatose who can't see the incredible batches of propaganda headlines being generated by the Main Stream Media, as a proxy misinformation arm of the state, and its other surrogates, during this election year?

Down is up through November 2nd even more so than usual in this election year, bitchez!

Never mind reality. Just be amused watching the true sheep dazed and confused as they try and reconcile what they see in their lives and the lives of their family, friends and neighbors with what they're being told and what they're reading as propagated by The Ministry of Truth MSM.

The CONFIDENCE FAIRY is out in a show of force that I've NEVER seen before in my life, ignoring actual bad data or spinning terrible data that is a pig's ear into a Gucci handbag.

Charge up the credit cards and borrow if you can, debt serfs, all your debts will easily be repaid when you feel the recovery that's kicked in on a personal level. /sarc-a-lark

Wed, 02/15/2012 - 12:23 | 2162115 lotsoffun
lotsoffun's picture

but as to the home builders - absorption ISN'T facilitated by increasing the amount to be absorbed.  you know that.  it comes with the prescription for the red pill 'do not take more than the prescribed amount'.  our culture is built on more is better and it's not always the case.


Wed, 02/15/2012 - 12:09 | 2162029 mirac
mirac's picture

agreed...decades maybe

Wed, 02/15/2012 - 12:19 | 2162089 redpill
redpill's picture

Keep in mind housing is likely to benefit if/when the entire stock market illusion begins to evaporate, there will be a desperate rush to put capital in something that is real and has some utility, and frankly many of the big money people in the US still don't understand gold/silver and won't buy it.

Wed, 02/15/2012 - 12:23 | 2162114 xtop23
xtop23's picture

Housing will benefit ..... or farmland ? I would think that anyone that actually has any dry powder , and is intelligent enough to put it into something relatively safe prior to high inflation , wouldn't be buying houses. They'd be purchasing farmland in Iowa.


 Assuming they have already bought plenty of Ag/Au.

Wed, 02/15/2012 - 13:18 | 2162378 blunderdog
blunderdog's picture

I personally doubt the affluent are going to start buying up houses.  They're holes into which you pour money UNLESS the cashflow works for rental, but that's not likely until valuations are reasonable.

Wed, 02/15/2012 - 14:28 | 2162730 VelvetHog
VelvetHog's picture

I personally doubt the effluent are going to start buying up houses.  They're holes into which you pour money UNLESS the cashflow works for rental, but that's not likely until valuations are reasonable.


Fixed it.

Wed, 02/15/2012 - 16:30 | 2163269 blunderdog
blunderdog's picture

Wordplay!  Ar ar!

(I don't get it.)

Wed, 02/15/2012 - 12:20 | 2162095 lotsoffun
lotsoffun's picture

housing is over.  life and corporations are cyclical.  bubbles start and end.  the next phase is the belief in building more 'rentals'.  but - who will have income to rent?  is kodak going to recover?  is woolworths going to recover?  or GM?  after a massive heartattack, recovery takes a long time.  bennie is pumping as fast as he can, that is all he knows.  obama is brain dead, as is the congress and tiny tim is keeping a low profile.  i suspect bill dudley is next treasury secretary.  he has a great recipe for i-craps.


Wed, 02/15/2012 - 12:27 | 2162131 Dermasolarapate...
Dermasolarapaterraphatrima's picture

RE works in 12 year cycles. Since they say we are five years into thsi downturn....we only have 7 more years of downturn to go.

So most likely prices will turn around May 12, 2019 (plus or miuns a day or two). That's if everything goes well.

Wed, 02/15/2012 - 14:26 | 2162725 VelvetHog
VelvetHog's picture

Yeah, but, its different this time...........

Wed, 02/15/2012 - 11:44 | 2161923 Alcoholic Nativ...
Alcoholic Native American's picture

By 2015 gasoline prices will be so high that a good portion of the existing houses out there in 20 minute commute land will be essentially worthless. 

Wed, 02/15/2012 - 11:51 | 2161945 Woodyg
Woodyg's picture

If people don't have jobs and the price of food, health care and energy are thru the roof then the chances of a housng recovery are ZERO.

At least a housing recovery where normal people buy them that is.

Let me add that ending the TBTF jackals monopoly over the economy and their Capture of the governing process coupled with ending the endless war machine would help.

Unfortunately Not enough pain yet.

When we see this then we'll know the tide is turnng.


Wed, 02/15/2012 - 12:04 | 2162005 redpill
redpill's picture

The US ponzi will be able to be dragged on much longer than it can in some other places, and as such the timeline will be longer.  Housing will have a chance to recover a bit before the SHTF in earnest.

Wed, 02/15/2012 - 13:27 | 2162428 sasebo
sasebo's picture

And where is the "money" coming from to buy all these houses? From producing something (GDP), getting paid & then saving some, or by some bank printing it? A BIG difference. Remember what happened in 07'? All the money came from some bank printing it. Then BAM!!!!!!!! 

Wed, 02/15/2012 - 12:31 | 2162154 baserunr
baserunr's picture

This is precisely why we don't count "the volatile food and energy components" in our inflation calculations.  The prices of these are not relevant, silly people!  As long as there is enough money to buy a new iPad, the world is fine.


I must go now, I hear helicopters outside.  No, they're not black.  It says on the side F-E-D-E-R-A-L......

Wed, 02/15/2012 - 13:46 | 2162519 Breaker
Breaker's picture

Silly boy. They don't send helicopters unless you say "Constitution," "Sovereign," or "God" in your post. Go ahead, be brave. Just pick one of the words and write it down. Then wait for the helicopters :)

Wed, 02/15/2012 - 12:10 | 2162033 AL_SWEARENGEN

It's a tough market right now.  I'm getting married this year and I'm torn on whether to buy or lease.  Problem with leasing (in western suburbs of Chicago) is nothing is cheap!  And you're stuck with whatever condition the place is in.  Buying gives you the option to remodel and make the place your own.  But buying in the state of Illinois gives me pause.  I mean this state is really fucked up!  Financially & constitutionally.  We're the only state in the union that offers NO permits to conceal carry or open carry a firearm.  - Unless your part of the Chicago crime machine of course..

Wed, 02/15/2012 - 12:29 | 2162141 machinegear
machinegear's picture

Neither. I recommend swimming across the Mighty Miss into Iowa; a slightly less socialized State. You can even get a weapons carry permit while you're there. Just bring $50 bucks.

Wed, 02/15/2012 - 13:52 | 2162546 FrankThinkTank
FrankThinkTank's picture

I can attest to the Western suburbs and Chicago being a shit hole - it truly is.

While you can't get a conceal permit, the state and municipality will be happy to charge you for every invented permit known to man in order to fix that house up.

Illinois was the first experiment, it's since moved onto the country as a whole. 

Wed, 02/15/2012 - 15:58 | 2163129 AL_SWEARENGEN

That's no exaggeration either.  I was in someone's home yesterday starting a project in their kitchen.  They said the town inspector was recently by and made them rip open an entire finished wall (painted, trimmed, etc) to verify enough wall insulation was used!

Wed, 02/15/2012 - 12:37 | 2162187 JPM Hater001
JPM Hater001's picture

Keep those predictions coming.  This one looks like a gem.  I'll take that to the bank.

Wed, 02/15/2012 - 14:33 | 2162750 ilovefreedom
ilovefreedom's picture

Mortgage Brokers' Association mortgage applications index--- demand for new home loans.

What does that have to do with homebuilder sentiment?

Based on the chart above, I don't see how there is any positive senitment except for being 2 ticks higher than the period ending Jan 2012 which was extremely dismal.

It's like the mortgage industry has cancer, but let's ignore that because their pimple before prom cleared up.


Wed, 02/15/2012 - 11:34 | 2161859 Richard Chesler
Richard Chesler's picture

NAHB, The Onion, BLS, ...

It's getting really hard to tell the difference anymore.


Wed, 02/15/2012 - 11:43 | 2161920 Rainman
Rainman's picture

Turbo Timmay is fast underwater too. Now renting out the old bungalow in Larchmont since 2009.



Wed, 02/15/2012 - 11:41 | 2161908 Cdad
Cdad's picture

"Point Out The Housing Recovery On This Chart"

Tyler...that's easy.  It's just a little off of the screen to the right.  Sheesh...not enough hopium smokin' goin' on out dere.

Wed, 02/15/2012 - 11:52 | 2161952 Woodyg
Woodyg's picture

'Just off the screen' - yea right behind the ads.

Wed, 02/15/2012 - 15:18 | 2162944 Car 54 Where Are U
Car 54 Where Are U's picture

Yes they are for cash...it's investors picking up properties on the cheap at forclosure auctions and REO sales.  Not 100% of the market yet but a very very significant porton.

Wed, 02/15/2012 - 11:19 | 2161744 undercover brother
undercover brother's picture

if your fudging one report, you may as well go all in and fudge them all

Wed, 02/15/2012 - 11:23 | 2161777 Cognitive Dissonance
Cognitive Dissonance's picture

Thanks for the pointer.

I'll try that on my 1040 this year. Wish me luck bro. :>)

Wed, 02/15/2012 - 11:33 | 2161855 EscapeKey
EscapeKey's picture

Proles are not invited to the party.

Wed, 02/15/2012 - 11:19 | 2161745 trade the day
trade the day's picture

Duh!!  You have to hit the "invert" button on your chart.

Wed, 02/15/2012 - 11:20 | 2161750 holdbuysell
holdbuysell's picture

Phrases/words of the year for 2012 so far:

"Seasonally Adjusted"


Anything else to add yet?

Wed, 02/15/2012 - 11:24 | 2161788 Fox-Scully
Fox-Scully's picture


Wed, 02/15/2012 - 11:25 | 2161790 pods
pods's picture

Well the meme du jour according to the radio news is:

"Iranian terrorist"


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