Pending home sales saw a modest monthly uptick but missed expectations for the fifth month in a row – the latest round of disappointing data for one of America’s most important economic indicators.
Nonetheless industry leaders are undeterred heading into the new year …
“We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014,” the National Association of Realtors’ top economist noted.
Really? “Positive fundamentals” in the job market? Somebody forgot to tell that to these people …
Also we think “contract activity in 2014” will be severely depressed by the 1,800 pages of new home ownership loan regulations promulgated by the nation’s latest market-infringing bureaucracy, the U.S. Consumer Financial Protection Bureau (CFPB).
Rising mortgage rates probably won’t help either …
FITS has been consistently calling out the housing “recovery,” and nothing in this data set strikes us as evidentiary of a positive correction.
11 comments
Rising mortgage rates probably won’t help either…
Well it is either that or you take manipulation from the Federal Reserve, so which do you want to complain about more?
4.5% isn’t that bad, anyways.
Preach on, brother. I remember how excited I was that mortgage rates (which had been between 10 and 12% while I was in the Army) dropped to just over the bargain basement rate of 8% by the time I got home so I buy my first little house with a genuine VA loan. I’ll take 4.5% all day.
Must you make sense finally. XP
A larger part of the housing market problem that people are unwilling to look at is the current cultural norm of moving every 2 – 5 years. Every time a homeowner buys and sells (vast majority of time) a realtor tacks on 7+% to the price of the house. ‘Just roll it into the loan’.
This mentality has artificially inflated the cost of home by at minimum 40% over the last 20-30 years. Which in turn has allowed local governments to rape homeowners. Every sale triggers a new valuation for taxes.
Home prices are way overvalued. I’ll wait till the bottom falls out. 6 months tops.
This will have 0 impact on the value of a home for people that live in a community, but an enormous impact on speculators and folks with ants in their pants who live in this house or that.
Can’t we bitch about both?
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I have some contacts in the national mortgage banking biz. They say that, except for certain places in some Southern states (ours included), the housing boom is a big, bad bubble. Again. The bubble is caused by more worthless loans to people who can’t pay, in the nation’s seven biggest cities.
With actual annual inflation rate at 30%, the economy is set for a slingshot effect in housing.
Housing boom??? What am I missing, most southern states especially South Carolina have not seen a housing boom that is going to cause a massive bubble to burst. Yeah they are building more homes, but it isn’t like prices are way up which is typically where you see the bubble burst.
Not trying to be rude, Matthew, but surely your education extended to subordinated clauses: “They say that, except for certain places in some Southern states (ours included), the housing boom is a big, bad bubble.”
To the other point – if you live in the Midlands, you may not know about it, which is totally understandable. In descending order: Greenville, Spartanburg, Charleston, Myrtle Beach, Georgetown, Rock Hill, and North Augusta properties have all experienced impressive growth in housing prices.
Not to cut too fine a point, unless salaries and incomes in Greenville, Spartanburg, Charleston, Myrtle Beach, Georgetown, Rock Hill, and North Augusta increase to a level that can sustain the impressive growth in housing prices; the only hope for the Southern housing bubble are (1) hyper-inflation (2) a large sinkhole to open up in the filled-in wetlands the McMansions are built upon or (3) hurricane washes them away and collect on the insurance policies.
Certainly an important consideration. I’ll take door #3, please.
Far be it from me to change the subject, but what happened to all of those repossessed houses that the banks are still carrying on their books at full value?
When are they going to come on the market as distressed properties, or be relegated to the mark-off bin?
Here in Texas, there’s a 9.7% INCREASE in the price of houses. Surely that can’t mean the banks unloaded the houses in the last Republican free-for-all that were so legion, they were having machines process the foreclosure papers for them 24/7, could it?
I’m not sure how many of my redneck neighbors are cerebral enough to know not to take out Adjustable interest loans. As I said in a previous thread, we’re all real smart out here in Texas.