Less than a week after the NAR reported September existing home [7]sales which surged at a 5.17 million annualized pace, the highest since September 2013, rebounding from the August drubbing which was also the worst miss in 2014, today the NAR flip-flopped and disappointed sellside expectations of a 1.0% rebound following the August -1.0% decline, rising a modest 0.3%, and less than half the 2.2% expected increase from a year ago, rising only 1.0% Y/Y. This was the third miss in the series in the last 4 prints.
[8]
Some commentary on the disappointing print, from Lawrence Yun, NAR chief economist: moderating price growth and sustained inventory levels are keeping conditions favorable for buyers. "Housing supply for existing homes was up in September 6 percent from a year ago, which is preventing prices from rising at the accelerated clip seen earlier this year,” he said. “Additionally, the current spectacularly low mortgage rates should help more buyers reach the market.”
That's funny: we have been hearing that for the past 6 years. We also heard that rising rates are also bullish for housing as it means buyers have to rush to catch the last low rates before the spike. That didn't quite pan out either.
More from the NAR [9]:
Despite improved housing conditions and low interest rates, tight credit conditions continue to be a barrier for some buyers. Of the reasons for not closing a sale, about 15 percent of Realtors in September reported having clients who could not obtain financing as the reason for not closing.
Was Ben Bernanke one of them?
Yun says the final rule on Qualified Residential Mortgages should improve access to credit once it goes into effect next year. “The rule provides clarity for lenders and is a win for creditworthy consumers by ensuring they continue to have access to safe and affordable loan products without overly burdensome downpayment requirements,” he said.
In other words, the next taxpayer bailout of Fannie and Freddie should be beneficial to those deadbeats credit-challenged McMansion buyers who can't afford a house? He may have a point there.
Pending home sales by region:
- The PHSI in the Northeast increased 1.2 percent to 87.5 in September, and is now 2.9 percent above a year ago. In the Midwest the index decreased 1.2 percent to 101.2 in September, and is now 4.0 percent below September 2013.
- Pending home sales in the South increased 1.4 percent to an index of 118.5 in September, and is 1.7 percent above last September. The index in the West inched back 0.8 percent in September to 101.3, but is still 3.6 percent above a year ago.
And while the end of the third dead cat bounce in the US housing market is increasingly a threat to any rumor of a US recovery, as is the concern of outright home price declines, the ECB has nothing to worry about deflating home prices: after all it "considered that won't happen", and so it shall be. Because who can forgot S&P's models #reffing out when it tried to assume declining home prices in its models...
