Author Topic: Existing Home Sales Fall By Most In 2013, Biggest Miss In 12 Months  (Read 469 times)

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Offline DCPatriot

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Existing Home Sales Fall By Most In 2013, Biggest Miss In 12 Months
Submitted by Tyler Durden


Existing home sales dropped 1.2% month-over-month - the biggest drop in 2013 - against expectations for a 1.5% rise. Critically though, this is for a period that reflects closings with mortgage rates from the April/May period - before the spike in rates really accelerated.

Inventory rose once again to 5.2 months of supply (vs 5.0 in May) and you know the realtors are starting to get concerned when even the ever-optimistic chief economist of the NAR is forced to admit that 'stunningly' "higher mortgage rates will bite."

With mortage applications having collapsed since May, we can only imagine the state of home sales (especially as we see all-cash buyers falling) for July.





more at:  http://www.zerohedge.com/news/2013-07-22/existing-home-sales-fall-most-2013-biggest-miss-12-months

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Offline DCPatriot

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Re: Existing Home Sales Fall By Most In 2013, Biggest Miss In 12 Months
« Reply #1 on: July 22, 2013, 11:37:14 AM »
Have been in the real estate business for over half my life....since 1978.

When I got into 'the business', mortgage rates were at 12%.   My father-in-law told me stories of 5% 30 year fixed and swore they'd be back.

I told him it wasn't going to happen.     .....and it wouldn't have happened if they weren't electronically injecting $89 BILLION dollars each month into the markets.

Back in the late 70's they didn't exclude the cost of food and gasoline in arriving at the true inflation number/index, etc..  Truth is, without government intervention, we'd have double digit inflation now and mortgage rates would be AT LEAST 10% fixed.

Back during the Bush economic boom it was the real estate boom that provided the fuel.

People refinanced their homes several times....increasing the loan balance...to take advantage of tax laws.  You couldn't write off credit card interest or car loan interest....but if you paid "cash" for the car by borrowing the money from a bank with your home as collateral....it was eligible for 100% write off....as it was treated as mortgage interest paid.

Not just autos....they remodeled their homes...they took vacations....they lived the American Dream.

All because of 'stated income' "liar loans"....banks threw money at people, because the value of the asset covering the loan was rising faster than the total owed.


Until 2006.

Mortage rates are artificially low and even with a nominal rate hike to 4.5%.....a rise of a full percent in the past two weeks...for people not to be rushing out there to buy right now is crazy.

Every month from here on out for the foreseeable future, the buyer is going to lose purchasing power.

IOW...if they can go to the limit of $200K for a home in the neighborhood they desire....in another month, the most they'll qualify for may be $150K.

NOTE TO POTENTIAL BUYERS.....RUN!!!!
"It aint what you don't know that kills you.  It's what you know that aint so!" ...Theodore Sturgeon

"Journalism is about covering the news.  With a pillow.  Until it stops moving."    - Iowahawk

Offline GourmetDan

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Re: Existing Home Sales Fall By Most In 2013, Biggest Miss In 12 Months
« Reply #2 on: July 22, 2013, 12:13:34 PM »
Mortage rates are artificially low and even with a nominal rate hike to 4.5%.....a rise of a full percent in the past two weeks...for people not to be rushing out there to buy right now is crazy.

Prolly a lot of people like me, making less than 1/2 of their former income and no benefits.

Buying a house is the last item on the list.  I'm just glad I was renting when it happened or I would be bankrupt...


"The heart of the wise inclines to the right, but the heart of the fool to the left." - Ecclesiastes 10:2

"The sole purpose of the Republican Party is to serve as an ineffective alternative to the Democrat Party." - GourmetDan


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