Someone Is Lying

Existing home sales beat expectations by the most since February 2010 surging 6.5% MoM to its highest SAAR level since March 2007.

Sound right? Of course, this is defended by the ever-honest NAR by a sudden panic surge of buyers as rates rose. However, we just wonder how sustainable this is (given the chart below). Judging by the NAR's history of revisionism, we suspect we know who is not telling the truth, the whole truth, and nothing but the truth.

 

 

So all cash buyers? Pulling forward demand? Sustainable trend? You decide...

 

and from the mouthpiece himself:

Lawrence Yun, NAR chief economist, said changes in affordability are impacting the market.  “Mortgage interest rates are at the highest level in two years, pushing some buyers off the sidelines,” he said.  “The initial rise in interest rates provided strong incentive for closing deals.  However, further rate increases will diminish the pool of eligible buyers.

 

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Despite higher mortgage interest rates, Yun identified compensating factors that can sustain a continued recovery. “Although housing affordability conditions will become less attractive, jobs are being added to the economy, and mortgage underwriting standards should normalize over time from current stringent conditions as default rates fall.”

 

So nothing to worry about... part-time jobs will soak up the excess costs of the mortgage as rates soar and banks will ease standards to make credit available to any muppet that can make an 'X' - great...