Despite Joe Lavorgna's seemingly gigantic cognitive dissonance in the face of this report, the pending home sales data collapsed in September (and remember this is before the shutdown and was heralded at the time as buyers rushing to buy before the risk of the shutdown slowed acceptances). Affordability, argued by some serial extrapolators as still being 'relatively' positive - has drastically weighed on housing at the margin just as we argued previously [5]. This is the first annual drop in 29 months, the biggest drop in 40 months, and the biggest miss against expectations in 40 months. Even the typically full of spin, NAR Chief economist had to admit "this tells us to expect lower home sales for the fourth quarter, with a flat trend going into 2014." Apparently, if one is to believe the spin, overheard everywhere in September: "Hmm, government may shut down next month - let's not buy a house."
Of course, NAR Chief Economist seems to have found an excuse by time-shifting his narrative...
NAR chief economist, said concerns over the government shutdown also played a role. “Declining housing affordability conditions are likely responsible for the bulk of reduced contract activity,” he said. “In addition, government and contract workers were on the sidelines with growing insecurity over lawmakers’ inability to agree on a budget. A broader hit on consumer confidence from general uncertainty also curbs major expenditures such as home purchases.”
Umm no Larry... because in our world September is before October and no one was talking about shutdown's impact then OR even pricing it in any way...
none of this should be a surprise given the impact on mortgage activity that higher rates have had...
Despite all the chatter that rates are still 'near' generational lows....
Of course - the market loves this crappy data is rallying handsomely as Taper is pushed off once again.