The MSM and the NAR are bloviating about the 6.5% increase in July existing home sales. But even Lying Larry Yun, the mouthpiece for the NAR, knows the gig is up. Contracts for July sales were finalized in May and June. The 10 Year Treasury rate was 1.54% on May 1. Today it is 2.85%. As rates began to rise, anyone on the fence about buying jumped in. Lying Larry even admits in his statement that the tremendous increase in mortgage rates from May (3.25%) through August (4.5%) will price many people out of the market. In fact, first time buyers have been out of the market and will be forced further from the market.
If you dig into the NAR press release, the truth is there.
The tremendous housing recovery over the last year is a Wall Street created farce. The number of distressed sales has plunged from 24% last year to 15% this year. Amazingly, when the Wall Street banks don’t put the millions of foreclosed homes on the market, the supply is lowered and prices are forced upward. This benefits the Wall Street banks as they buy up foreclosed houses from themselves with the 0% financing from Bennie and then pretend to be landlords until they drive prices high enough to dump them on the muppets again. This is why all-cash purchases have surged to 31% of all home sales. Blackrock and the other Wall Street shysters are screwing Americans again.
Who suffers in this scenario? First time buyers. The number of first time buyers has plunged to 29%, down from 34% last year and well below the normal level of 40%. The entire housing recovery has been a fraud. This surge in mortgage rates is going to reveal who has been swimming naked. Larry Yun should be looking for his next gig. The roof on this fake housing market is about to fall in on his fat head.
Just check out the ZH chart below. Mortgage applications always plunge when home sales skyrocket. Right?
Someone Is Lying
Submitted by Tyler Durden on 08/21/2013 10:16 -0400
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.”
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…