Housing Horrors Continue: New Home Sales Tumble To Lowest Since 2016

Extending July's weakness (in new, existing, and pending home sales), August is off to a rough start with existing sales and now new home sales has collapsed (down 3.4% vs expectations of a 2.5% gain). July's big plunge in sales was revised slightly higher but this left August with a 560k SAAR sales rate - the weakest since Dec 2016.

This is the first back to back decline in new home sales since June 2016.

Bloomberg does not that there may be caveats to this data (aren't there always?).

While data aren’t available at the state or local level, areas in Texas and Florida affected by Harvey and Irma accounted for about 14 percent of single-family housing units authorized by permits in 2016, the Census Bureau said in a special notice. If no sales information is received by the government, the units’ status is assumed to be unchanged. It may be hard to get a clear read on the market’s underlying trends in the next few months as economic data become volatile thanks to three major hurricanes: Harvey in southeast Texas in late August, Irma in Florida in early September, and Maria in Puerto Rico last week.

On the bright side, Median home prices tumbled...

But finally, as we noted previously, none of this fundamental supply/demand stuff matters...

Record high homebuilder stocks vs weakest macro housing data since Feb 2014.


LawsofPhysics Tue, 09/26/2017 - 10:12 Permalink

The rentier class of bankers and financiers with continuing access to essentially FREE MONEY could not be happier!!!fuck everyone else, now pay up slaves!!!!!welcome to the global plantation!! LOL!!!"Full Faith and Credit"

canisdirus Hikikomori Tue, 09/26/2017 - 16:46 Permalink

I was wondering why the market was down so hard. We just bought a house and were baffled by the fact that it was on the market for a whole month with no offers even though they've been selling in days this entire year. We even got it below asking without a bidding war, which doesn't happen in the local market here. Inventory is going up, time on the market is going up, and price cuts are starting to show up, especially in outlying areas.Something is breaking in the market and I think we may be among the first buyers just past the peak. It's all downhill from here.At least it's cheaper than rent, which is all I really care about right now.

In reply to by Hikikomori

economessed Bay of Pigs Tue, 09/26/2017 - 10:22 Permalink

Correct.  The more housing starts implode, the more we're willing to pay for homes.  This makes perfect sense in the American housing market.  Same is true of the stock market - the higher prices go for crappier, manipulated stocks, the more we demand to own them. Take whatever basis of common sense you thought you had and sell it on eBay.

In reply to by Bay of Pigs

canisdirus Bay of Pigs Tue, 09/26/2017 - 16:50 Permalink

We are.We're also at all-time lows in inventory. Nobody is selling, which is what's propping this market up. Supply is far too low to meet demand. A drop in starts is worse news for prices.Good news for prices is when baby boomers start dying by the millions every year, leaving millions of SFHs empty so they can be sold, which will finally put downward pressure on prices.

In reply to by Bay of Pigs

Silver Savior Tue, 09/26/2017 - 10:13 Permalink

Hoping for a worldwide housing collapse and depression. Want to be able to live care free like a middle class person in the 1960s. As it is housing can take most of someone's income in itself and that just is not right. 

PitBullsRule Tue, 09/26/2017 - 10:20 Permalink

Horse shit, house sales always fall after the summer, they peak in the summer when kids are out of school, fall in the winter.  Last year was when it did the exact same thing, thats why its worst since last year.  Horse shit, you commies can do better than that!

Dogman57 Tue, 09/26/2017 - 10:22 Permalink

I suppose a house is ok if you want to pay property taxes, water, electricity, gas, insurance...and on and on.  What to do when the teachers go on strike for more money...yet the students continue to fail and your property taxes continue to rise.  I got out of that in 2012...now I pay rent and electricity...I save a ton of money.

Consuelo Francis Marx Tue, 09/26/2017 - 11:15 Permalink

  It wasn't in 2009/2010 in the Bay Area... Landlords were offering sign up 'bonuses' - i.e., move in free, reduced rates, etc., all over the place.   The 180 degree opposite of what you see right now in arguably the poster-child region for rent-insanity.And guess, what?   It's gonna come around again.   And I am gonna have me a fucking hard-on for the ages to see 'landlords', property managers and real-estate agents standing in the bread line when it does.  Oh Happy Day...!!!

In reply to by Francis Marx

XBroker1 Dogman57 Tue, 09/26/2017 - 12:14 Permalink

Students continue to fail alright. They can't even figure out that their rent pays for the property taxes plus other expenses PLUS a profit for the landlord. I don't get where all these renters got the idea renting was a way to avoid proptery taxes. I was in sales nearly 30 years & never considered trying to sell someone on such a lame idea. lol

In reply to by Dogman57

Gorgeous Dogman57 Tue, 09/26/2017 - 13:40 Permalink

A house is also ok if you can do the repair and upgrades yourself, plan to stay in one place so the kids can go through the schools with their friends, pick a good school system that will always have value, and can wait for the asset to appreciate over the long haul.  I was fortunate to get in years ago.  It is gettng harder to do now for sure.

In reply to by Dogman57

Bemused Observer Tue, 09/26/2017 - 10:30 Permalink

You do realize the time-frame we are talking about here is like 8 months, right? So, they've "tumbled to their lowest" since...8 months ago? This short-term thinking has done far more damage than I initially believed. It's almost like watching a movie...In fact, between 'Network', Idiocracy', and now '50 First Dates', Hollywood will be viewed in future as the Nostrodamus of our day...yep, they've pretty much called it, all of it.   

Batman11 Tue, 09/26/2017 - 10:38 Permalink

Watch out for mode 2.Free market capitalism had 40 years to prove itself, but blew itself up in 2008.Its neoclassical economists had forgotten markets have two modes of operation:1) Price discovery2) Bigger fool mode where everyone rides the bubble for capital gainsYou may remember hearing about mode two in Tulip Mania; it’s as old as the hills.Everyone likes mode two because you can earn money doing nothing with mode two. You just sit on your behind and the asset goes up in price. You must make sure you are not the biggest fool that gets caught carrying the can at the end.Everyone knows about mode two and it’s what the real estate market thrives on. That is, everyone apart from neoclassical economists.Everyone loved the markets until the last Wall Street Crash in 1929.It’s that mode two, again.

innertrader Tue, 09/26/2017 - 13:48 Permalink

In my area, housing starts are good and sales are good, which creates new all time highs in price!  There are some good deals out there, but you have to search for them!SETH RICH???TRIUMPH with TRUMP!!!