In classic MSM fashion, the headlines about existing home sales crow that they are the highest in a year. The truth is they are 1.7% LOWER than last September. But at least inventory for sale is 6% HIGHER than last September. Lower sales and higher inventory always do wonders for prices. Right?
First time home buyers as a percentage of buyers remains at historic lows of 29%. This number should be 40%. The Chinese and the flipper morons continue to drive cash purchases at 30% of all sales. Mortgage applications remain at two decade lows despite mortgage rates below 4%.
Yeah – this is a wonderful report. Buy stocks.
Existing Home Sales Rise 2.4% In September (But Down 1.70% YoY), Back To 2001 Levels
Existing home sales in September rose 2.4% to get back to 2001 levels. Year over year change in existing home sales were down 1.70%.
If it wasn’t for 30% cash sales, the existing home sales numbers would be dreadful.
The growth was mostly in the West and South.
We can thank The Federal Reserve’s quantitative easing programs (particularly QE3) for juicing existing home sales in the face of lower/stagnant real income and “Death Valley” mortgage purchase applications.
The Fed Futures data is pointing to a Carnival Cruise trip with The Fed Funds rate likely to rise in the near future. Or at least more likely than it has been in the past year.
Here is The March of The Federal Reserve as it distorts prices and incentives.
Home values have been falling for about 6 months.