The perennial losers at the National Association of Realtors who have never seen a bad number they couldn’t spin into a positive for housing seem a little depressed in their press release this morning.
It seems the increase they reported last month was not really an increase, as it was adjusted downward dramatically. Existing home sales over the last three months have been:
September – 5.29 million
August – 5.39 million (originally reported as 5.48 million)
July – 5.39 million
Some juicy tidbits from their release included:
- “Affordability has fallen to a five-year low as home price increases easily outpaced income growth. Expected rising mortgage interest rates will further lower affordability in upcoming months.” – Larry “Lapdog” Yun – Chief Shill
- According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.49 percent in September from 4.46 percent in August, and is the highest since July 2011 when it was 4.55 percent; the rate was 3.47 percent in September 2012.
- Data from realtor.com,4 NAR’s listing site, show some of the strongest increases in listing price from a year ago are in the Detroit area, up 44.6 percent; Las Vegas, up 30.7 percent; and Sacramento, up 28.9 percent.
- “Realtors® report that approximately 10 percent of transactions in September were located in flood zones, and that nearly one out of 10 of those transactions were delayed or canceled due to concerns over rising insurance rates.” Notably higher flood insurance rates went into effect on October 1, and could impact future sales in flood zones.
That sound you are hearing is a bubble deflating. With Flip that House getting good ratings on cable TV again and the armpits of the U.S. – Detroit and Las Vegas – showing 30% to 45% price increases in one year, you know the top is in. Considering all Bernanke and Wall Street have done to lure muppets into the housing market, this is all they got? Existing home sales have peaked out at 1999 levels. Mortgage rates are at two year highs and the Wall Street buy to rent scheme has run its course. They had sucessfully driven the median price up by 28% from the low in 2011 to the high of June 2013 through artificially restricting available supply by foreclosure manipulation and allowing Wall Street firms to buy up millions of houses in their buy and rent scheme. The median price has fallen 7% since June and sales are now in decline. The Wall Street scam artists are all exiting at the same time because their Ivy League MBA developed financial models are telling them to exit before the muppet slaughter.
The amateurs are now in control. Investors (I use that term loosely) accounted for 33% of all sales in September, up from 28% last year. These are the flippers who will be stuck holding the bag – AGAIN. Idiots never learn. In a truly healthy housing market, first time home buyers account for 40% to 50% of all sales. They accounted for 28% in September, down from 32% last year. The ridiculous home price increases, huge jump in mortgage rates, massive student loan debt burden, and lack of decent paying jobs has destroyed the first time home buyer. Without these buyers, the housing market is dead.
Wait for it.