Tag Archives: Home Sales

US Pending Homes Sales Tumble YoY For 13th Straight Month

After plunging further in December, January Pending Home Sales rebounded more than expected (+4.6% MoM vs +1.0% MoM exp) but remains lower YoY for the 13th straight month.

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“A change in Federal Reserve policy and the reopening of the government were very beneficial to the market,” NAR Chief Economist Lawrence Yun said in a statement.

“Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers.”

On a Year-over-year basis, the rebound left Pending Home Sales down just 2.27% YoY, but that is still the 13th annual drop in a row…

https://www.zerohedge.com/s3/files/inline-images/2019-02-27_7-05-13.jpg?itok=7nDh-48k

Source: ZeroHedge

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More Home-Sellers are Dropping Their Prices Than in Previous Winters as Buyers Seize More Control of the Market

https://www.redfin.com/blog/wp-content/uploads/2019/02/price-drops-national_february-2019.png

More than one in five homes for sale nationwide dropped its price in the last month. In Fresno it was two in five.

Pending Home Sales Plunge In August, Led By Collapse In The West

Pending home sales plunged in August, dropping 1.8% MoM (almost four times worse than expected) to its lowest since Oct 2014 (and fell 2.5% YoY) – the fourth month of annual declines in a row…

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As Bloomberg notes, the decline, which was broad-based across all four regions, shows that higher mortgage rates, rising prices and a shortage of affordable homes continue to squeeze buyers. Existing-home sales in August matched the lowest in more than two years, while revisions to new-home sales showed a slower market than thought, according to previously released figures.

https://www.zerohedge.com/sites/default/files/inline-images/2018-09-27_7-05-10.jpg?itok=8qAJpB6P

NAR continues to blame low inventory and affordability

“Pending home sales continued a slow drip downward,” Lawrence Yun, NAR’s chief economist, said in a statement.

“The greatest decline occurred in the West region where prices have shot up significantly, which clearly indicates that affordability is hindering buyers and those affordability issues come from lack of inventory, particularly in moderate price points.”

On a non-seasonally adjusted basis, sales In The West collapse 9.9% YoY…

https://www.zerohedge.com/sites/default/files/inline-images/2018-09-27_7-09-09.jpg?itok=numhxeTt

As a reminder, economists consider pending-home sales a leading indicator because they track contract signings; purchases of existing homes are tabulated when a deal closes, typically a month or two later.

Source: ZeroHedge

Existing Home Sales At Lowest In 30 Months, Inventories Rise First Time In 3 Years

Following continued weakness in July, analysts once again hope for a rebound in home sales in August but once again they were disappointed. August existing home sales were unchanged from July’s -0.7% drop, hovering at 5.34mm SAAR – the lowest since Feb 2016.

Expectations were for a 0.5% jump in August, but printed unchanged (home sales haven’t seen a monthly increase since March)

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Both single-family and multi-family units were unchanged in August as median prices dipped for the second month in a row (up 4.6% YoY still).

The West saw a 5.9% slump MoM in existing home sales as Northeast sales rose 7.6% MoM.

Inventory of available properties rose 2.7% y/y to 1.92m, which was the first increase in more than three years. At the current pace, it would take 4.3 months to sell the homes on the market, compared with 4.1 months a year earlier; Realtors group considers less than five months’ supply consistent with a tight market.

“While inventory continues to show modest year over year gains, it is still far from a healthy level and new home construction is not keeping up to satisfy demand,” said Yun.

“Homes continue to fly off the shelves with a majority of properties selling within a month, indicating that more inventory – especially moderately priced, entry-level homes – would propel sales.”

Hope is high for NAR however…

“There are buyers on the sidelines” ready to re-enter the market, Lawrence Yun, NAR’s chief economist, said at a press briefing accompanying the report.

“The housing market can turn for the better” as long as inventory continues to rise, he said.

And despite NAHB sentiment near cycle highs, home builder stocks and housing data continues to tumble…

https://www.zerohedge.com/sites/default/files/inline-images/2018-09-20_6-58-13.jpg?itok=XHjfUvNm

Time for more rate-hikes, right?

“Rising interests rates along with high home prices and lack of inventory continues to push entry-level and first time home buyers out of the market,” said Yun.

“Realtors continue to report that the demand is there – that current renters want to become homeowners – but there simply are not enough properties available in their price range.”

Source: ZeroHedge

Existing Home Sales Tumble As Home-Buying Sentiment Hits Lehman Lows

After June’s dismal US housing data, hope was high for a rebound in July but it was crushed as existing home sales tumbled 0.7% MoM (against expectations of a 0.4% jump). This is the longest streak of declines since the taper tantrum in 2013.

  • Single-family home sales fell 0.2% MoM (-1.2% YoY) to annual rate of 4.75 million
  • Purchases of condominium and co-op units dropped 4.8% MoM (-3.3% YoY) to a 590,000 pace

https://www.zerohedge.com/sites/default/files/inline-images/2018-08-22_7-02-18.jpg?itok=ikw0qyBD

As lower-priced home sales collapsed…

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This is the weakest SAAR existing home sales (5.34mm) since Feb 2016…

https://www.zerohedge.com/sites/default/files/inline-images/2018-08-22_7-04-12.jpg?itok=9LjuLVEe

The median sales price increased 4.5% YoY to $269,600, but dipped MoM (seasonal norm)

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Lawrence Yun, NAR chief economist, says the continuous solid gains in home prices have now steadily reduced demand.

Led by a notable decrease in closings in the Northeast, existing home sales trailed off again last month, sliding to their slowest pace since February 2016 at 5.21 million,” he said.

“Too many would-be buyers are either being priced out, or are deciding to postpone their search until more homes in their price range come onto the market.”

“In addition to the steady climb in home prices over the past year, it’s evident that the quick run-up in mortgage rates earlier this spring has had somewhat of a cooling effect on home sales,” said Yun.

“This weakening in affordability has put the most pressure on would-be first-time buyers in recent months, who continue to represent only around a third of sales despite a very healthy economy and labor market.”

Total housing inventory at the end of July decreased 0.5 percent to 1.92 million existing homes available for sale (unchanged from a year ago). Unsold inventory is at a 4.3-month supply at the current sales pace (also unchanged from a year ago).

And finally a glance at the following chart shows that the US housing market is in freefall – not what record high stocks would suggest…

https://www.zerohedge.com/sites/default/files/inline-images/2018-08-22_6-52-35.jpg?itok=n8a_zlvy

Perhaps this helps explain it – Sentiment for Home-Buying Conditions are the worst since the infamous Lehman Brothers collapse

https://www.zerohedge.com/sites/default/files/inline-images/2018-08-22_6-57-10.jpg?itok=9ODxJqdm

Source: ZeroHedge

Existing Home Sales Suffer Worst Losing Streak Since 2014, Price Hits Record High

Following last month’s disappointing starts/permits data and home sales prints, hope was high for a June rebound but they are gravely disappointed. Existing home sales tumbled 0.6% MoM (vs expectations of a 0.2% rise) and even worse, it’s off a downwardly revised May print of 0.7% MoM, with median home price hitting a record high $276k.

This is the first 3-in-a-row decline for existing home sales since Jan 2014…

https://www.zerohedge.com/sites/default/files/inline-images/2018-07-23_7-05-40.jpg?itok=SrivNVfd

Existing Home Sales SAAR is almost at its weakest since Jan 2016…

https://www.zerohedge.com/sites/default/files/inline-images/2018-07-23_7-04-56.jpg?itok=pb2nv1lH

Lawrence Yun, NAR chief economist, says closings inched backwards in June and fell on an annual basis for the fourth straight month.

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“There continues to be a mismatch since the spring between the growing level of homebuyer demand in most of the country in relation to the actual pace of home sales, which are declining,” he said.

“The root cause is without a doubt the severe housing shortage that is not releasing its grip on the nation’s housing market. What is for sale in most areas is going under contract very fast and in many cases, has multiple offers. This dynamic is keeping home price growth elevated, pricing out would-be buyers and ultimately slowing sales.”

The median existing-home price for all housing types in June was $276,900, surpassing last month as the new all-time high and up 5.2% from June 2017 ($263,300). June’s price increase marks the 76th straight month of year-over-year gains.

Homebuilder stocks have generally drifted lower with the dismal data but have yet to take the next leg lower…

https://www.zerohedge.com/sites/default/files/inline-images/2018-07-23_6-59-11.jpg?itok=l00IjTqe

Source: ZeroHedge

Case-Shiller Home Prices Rise At Fastest Pace In 4 Years To New Record High

Thanks to a modest downward revision in February’s print, March’s Case-Shiller 20-City Composite Home Price Index rose at 6.79% YoY – the fastest price appreciation since June 2014.

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Surpassing July 2006’s record high…

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Broadening out from the 20-City composite, the national home-price gauge climbed 6.5% YoY, matching February’s YoY advance that was the biggest since May 2014.

Of course, since March, interest rates have spiked and along with them mortgage rates, plunging mortgage apps, and as property-price appreciation continues to outpace worker pay (by 3.8 times!), it is proving a disadvantage for younger or first-time buyers even as it means rising homeowner equity for others.

“Months-supply, which combines inventory levels and sales, is currently at 3.8 months, lower than the levels of the 1990s, before the housing boom and bust,” – David Blitzer, chairman of the S&P index committee, said in a statement –

“Until inventories increase faster than sales, or the economy slows significantly, home prices are likely to continue rising.”

All 20 cities in the index showed year-over-year gains, led by a 13 percent increase in Seattle, a 12.4 percent advance in Las Vegas and 11.3 percent pickup in San Francisco.

Source: ZeroHedge

Highest Mortgage Rates In 8 Years Unleash Bidding Wars, Home Buying Frenzy

Yesterday when looking at the latest MBA Mortgage Application data, we found that, as mortgage rates jumped to the highest level since 2011, mortgage refi applications, not unexpectedly tumbled to the lowest level since the financial crisis, choking off a key revenue item for banks, and resulting in even more pain for the likes of Wells Fargo.

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Today, according to the latest Freddie Mac mortgage rates report, after plateauing in recent weeks, mortgage rates reversed course and reached a new high last seen eight years ago as the 30-year fixed mortgage rate edged up to 4.61% matching the highest level since May 19, 2011.

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But while the highest mortgage rates in 8 years are predictably crushing mortgage refinance activity, they appears to be having the opposite effect on home purchases, where there is a sheer scramble to buy, and sell, houses. As Bloomberg notes, citing brokerage Redfin, the average home across the US that sold last month went into contract after a median of 36 only days on the market – a record speed in data going back to 2010.

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To Sam Khater, chief economist of Freddie Mac, this was a sign of an economy firing on all cylinders: “This is what happens when the economy is strong,” Khater told Bloomberg in a phone interview. “All the higher-rate environment does is it either causes them to try and rush or look at different properties that are more affordable.”

Of course, one can simply counter that what rising rates rally do is make housing – for those who need a mortgage – increasingly more unaffordable, as a result of the higher monthly mortgage payments. Case in point: with this week’s jump, the monthly payment on a $300,000, 30-year loan has climbed to $1,540, up over $100 from $1,424 in the beginning of the year, when the average rate was 3.95%.

https://www.zerohedge.com/sites/default/files/inline-images/median%20sale%20price%20refin.jpg?itok=E_RTfL65

As such, surging rates merely pulls home demand from the future, as potential home buyers hope to lock in “lower” rates today instead of risking tomorrow’s rates. It also means that after today’s surge in activity, a vacuum in transactions will follow, especially if rates stabilize or happen to drop. Think “cash for clunkers”, only in this case it’s houses.

Meanwhile, the short supply of home listings for sale and increased competition is only making their purchases harder to afford: according to Redfin, this spike in demand and subdued supply means that home prices soared 7.6% in April from a year earlier to a median of $302,200, and sellers got a record 98.8% of what they asked on average.

Call it the sellers market.

Furthermore, bidding wars are increasingly breaking out: Minneapolis realtor Mary Sommerfeld said a family she works with offered $33,000 more than the $430,000 list price for a home in St. Paul. The listing agent gave her the bad news: There were nine offers and the family’s was second from the bottom.

For Sommerfeld’s clients, the lack of inventory is a bigger problem than rising mortgage rates. If anything, they want to close quickly before they get priced out of the market — and have to pay more interest.

“I don’t think it’s hurting the buyer demand at all,” she said. “My buyers say they better get busy and buy before the interest rates go up any further.”

Then again, in the grand scheme of things, 4.61% is still low. Kristin Wilson, a loan officer with Envoy Mortgage in Edina, Minnesota, tells customers to keep things in perspective. When she bought a house in the early 1980s, the interest on her adjustable-rate mortgage was 12 percent, she said.

“One woman actually used the phrase: ‘Rates shot up,’” Wilson said. “We’ve been spoiled after a number of years with rates hovering around 4 percent or lower.”

Of course, if the average mortgage rate in the America is ever 12% again, look for a real life recreation of Mad Max the movie in a neighborhood near you…

Source: ZeroHedge