Soaring home prices and plunging home sales. Sounds like the best time to buy. How many people in this country can afford to buy a median priced house of $296,900? With one of those 3% down FHA loans, a family would have a monthly tab of at least $1,800 to cover principal, interest, property taxes and home owners insurance. The median household income is $54,000. The monthly nut for a median priced home would equal 50% of their monthly take home pay. I wonder why new home sales suck and continue to linger at 1991 levels? Of course, this could all be cured with a modest 40% collapse in housing prices. 🙂
Submitted by Tyler Durden on 10/26/2015 10:11 -0400
Homebuilders were exuberant, The Fed was confident, and stock markets have recovered… so why did New Home Sales collapse 11.5% in September (missing a 0.6% drop expectation by a proverbial mile)? This is the largest MoM drop since July 2013. Worst still, the excitement of July and August data has been notably revised lower to press the current New Home Sales SAAR to 468k – its lowest since November 2014. At the same time, median home prices surged to $296,900 – the highest in 2015. Time to hike rates?
Biggest MoM drop since July 2013… (and weakest YoY growth +2.0% since Nov 2014)
It seems Homebuilders really don’t know anything after all…
Chart: BBG
