Existing Home Sales Extend Plunge, Biggest Annual Drop Since 2014

After new- and existing-home sales tumbled in December, expectations were for a modest 0.5% rebound in January (despite plunging mortgage applications and soaring rates). But that did not happen as existing home sales tumbled 3.2% MoM to its lowest level since Aug 2016.

Existing Home Sales are unchanged since June 2015...

(NOTE - this data is based on signed contracts from Nov/DEC, which means the recent spike in rates is not even hitting this yet)

Existing home sales are down 4.8% YoY - the biggest drop since August 2014.

The West (-5.0%) and Midwest (-6.0%) saw the biggest drop in sales and while the blame (see below) was put on inventories, data shows a 4.1% increase in "available for sale" homes?

Of course NAR is careful to blame inventories - and not soaring rates affecting affordability: Lawrence Yun, NAR chief economist, says January’s retreat in closings highlights the housing market’s glaring inventory shortage to start 2018.

“The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the U.S. last month,” he said.

“While the good news is that Realtors® in most areas are saying buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January’s pace.

"It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.”

The median existing-home price in January was $240,500, up 5.8% from January 2017.

First-time buyers were 29 percent of sales in January, which is down from 32 percent in December 2017 and 33 percent a year ago.

“The gradual uptick in wages over the last few months is a promising development for the housing market, but there’s risk these income gains could be offset by the recent jump in mortgage rates,” said Yun.

“That is why the pace of added new and existing supply in the months ahead is worth monitoring. If inventory conditions can improve enough to cool the swift price growth in several markets, most prospective buyers should be able to absorb the higher borrowing costs.

So, will higher rates break housing market momentum?

The following chart suggest 'yes' - that surge in rates will have a direct impact on home sales (or prices will be forced to adjust lower) as affordability collapses...


mvsjcl Wed, 02/21/2018 - 10:09 Permalink

Off topic, but I thought I'd throw it out there instead of waiting for the next shooting thread.

Let's see, the Marjory Stoneman Douglas High School shooting occurs in the afternoon on February 14. In less than 3 day's time (Creation Date: 2018-02-17T19:18:45Z [godaddy.com]), a complete web site called marchforourlives.com is launched, purportedly as a reaction to the shootings. From the home page of marchforourlives:

"March For Our Lives is created by, inspired by, and led by students across the country who will no longer risk their lives waiting for someone else to take action to stop the epidemic of mass school shootings that has become all too familiar. In the tragic wake of the seventeen lives brutally cut short in Florida..."

Now, I've done a little programming in my time, and I know that it takes somewhat longer than three days to write, test, and launch a web site. So, then, I have to wonder, what whiz of efficiency created and registered this marvel of timeliness? Godaddy tells me, "Registrant Name: Registration Private." Heck, if I was that good, I'd sure want the world to know! Why hide your name?


Why, indeed. This all smells. Color me skeptical, with a tinge of jaded.

Stu Elsample mvsjcl Wed, 02/21/2018 - 11:01 Permalink

Very believable.....or maybe the conniving bastards knew that sooner or later a mass shooting would take place and already had a website (with a generic term name) in place, and made it fit the incident afterwards???

Regardless, in this case the mass shooter survived. The deep state hits never end that way.


In reply to by mvsjcl

Stu Elsample Wed, 02/21/2018 - 10:11 Permalink

The Obama administration had deliberately planted 3rd world welfare trash in ALL white neighborhoods, and especially in small rural towns (to screw with the voting, and because he hates whites period)....anyone who thinks that that has had no effect on housing sales and property values is a fool.

Liberaldisdain Stu Elsample Wed, 02/21/2018 - 10:22 Permalink

Yep, the white population in Tampa has plunged over 25% in the 25 years I have lived here.  As they have shut down housing projects and moved the section 8 crowd, the entire northern swath of Tampa is now either ghetto or Venezuela/Columbia.  New Tampa has fallen too. 

It's not my culture anymore, Im getting out, along with many others. 

And when you check demographics of other areas I have not found a single place where the white population has not lost ground in this state. Maybe Wyoming or some place like that, but sure as hell not Florida. 

In reply to by Stu Elsample

HRH of Aquitaine 2.0 Liberaldisdain Wed, 02/21/2018 - 10:29 Permalink

I hope you follow people like Colin Flahetry ( www.minds.com/Flaherty ) and Mele Host and Vlad Tepes. Section 8 is a way to destroy a white suburb. Mine is infested, now. It's the reason the clock is ticking. I plan on renting out my place. Mobs of colored youth are not an improvement. My area has lots of white liberals so they won't notice until their property values are shit.

In reply to by Liberaldisdain

Kidbuck Liberaldisdain Wed, 02/21/2018 - 13:36 Permalink

With few exceptions, cities and neighborhoods have a life span. As the houses deteriorate and become less desirable with age the lowlifes move in. My aunt Alice and Uncle George and their 3 kids moved from Maine to Compton, California in the 1950's. Lowlife blacks moved in and they got so discouraged with the quality of life that they moved back to Maine. A few years later, tired of the Maine winters Alice and George moved back to California.  The now adult kids stayed in New England. Forget what city, but 10 years later Alice and George got run out of the neighborhood by the low life Mexicans and they came back to Maine to stay. 

In reply to by Liberaldisdain

buzzsaw99 Wed, 02/21/2018 - 10:13 Permalink

“The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the U.S. last month,” he said...

When Yun says "much of the U.S." he means California.  Everything he says is California real estate flipper-centric.

Honest Sam buzzsaw99 Wed, 02/21/2018 - 10:32 Permalink

Not true.

Here in Eastern PA. these fucking professional Indians, are driving prices thru the roof, when, if they had a real brain, they would be making offers 40% below the asking price.

They amass in groups of 4--5 families in a development, and pay the asking price instead of negotiating much more in line with what the value of what these pieces of shit are worth. Then they lease the Beemers, Mercs and Audis by the baker's dozen and STILL do not negotiate.

It's causing holy havoc to discretionary income for them and the non-indians that are forced also to pay these ridiculous prices.

A crash, a hard crash in this part of the country would be a breath of fresh air for the first time in 8 years.




In reply to by buzzsaw99

Consuelo buzzsaw99 Wed, 02/21/2018 - 13:21 Permalink



The radio ads for flipping - Than Merrill, Nick Vertucci, et al., have extended well past what I ever thought possible - no doubt tracking cheap money (interest rates), all along the way.   Usually, that hustle blows in & out a matter of (2) years max.   These ads have been going steady since 2012...

Dude, when this Fucker blows ---- I can't even put words to it.    I've maintained that FAANG layoffs are the canary for this powder keg...   Even a whiff of something like that in this area (S.F.) Bay Area, spells instant diarrhea for the realtor community - and the entire Bay Area cum-social-media hullaballoo the same.   

In a perverse way, I can't wait...  

In reply to by buzzsaw99

Lostinfortwalton Wed, 02/21/2018 - 10:26 Permalink

Well, low mortgage rates resulted in the price of housing being pumped up, higher mortgage rates will restrict purchases until the price asked of houses comes down. Duh.

rejected Wed, 02/21/2018 - 10:27 Permalink

"The median existing-home price in January was $240,500, up 5.8% from January 2017." 

I'd live in a cardboard box first. Can't believe morons are burying themselves in debt like this. 

exartizo Wed, 02/21/2018 - 10:44 Permalink

the current problem with real estate is not the 4% mortgage.

the current problem with real estate is the 5%-7% mortgage by the end of 2018.

surf@jm Wed, 02/21/2018 - 12:01 Permalink

Next up.......50 year mortgages on quarter million dollar hovels........Welcome to Japan.....

Make sure you indebt your kids on that mortgage for your house........

E5 Wed, 02/21/2018 - 12:14 Permalink

Supply my ass.

Gee, Rates jump and both new and existing plummet.  New have a much better pipeline of credit paper processing so they always retract less in the beginning.

Pinefox Wed, 02/21/2018 - 12:16 Permalink

Property taxes need to be added to the equation.  I live in Seattle in a one bedroom, one bathroom 1938 house with a partially finished 1960s  basement in a nice neighborhood.  My property taxes are now $6,300, Many seniors are getting taxed out of their homes and younger people can't afford the mortgage plus prop. taxes and insurance.  In my book, being taxed on an unrealized gain is unconstitutional.  How do we turn the clock back?