Posted on 10/28/2022 7:13:21 AM PDT by John W
Pending home sales, a measure of signed contracts on existing homes, dropped a much worse-than-expected 10.2% in September from August, according to the National Association of Realtors.
Economists had predicted a 4% drop. Sales were down 31% year over year.
This marks the lowest level on the pending sales index since June 2010, excluding April 2020, when the Covid pandemic was in its early days.
Realtors point squarely to sharply higher mortgage rates, which had sat at record lows for the first two years of the pandemic. The average rate on the popular 30-year fixed mortgage was right around 3% at the start of this year, but then rose swiftly, crossing 6% in June, according to Mortgage News Daily. It pulled back a bit in July and August, but then began rising again, crossing 7% in September, when these contracts were signed.
“Persistent inflation has proven quite harmful to the housing market,” said NAR Chief Economist Lawrence Yun. “The Federal Reserve has had to drastically raise interest rates to quell inflation, which has resulted in far fewer buyers and even fewer sellers.”
(Excerpt) Read more at cnbc.com ...
UNEXPECTED!..........................Do they ever ‘Expect’ anything right?..................
Seldom it seems but this miss is comical.
Success!
"Unexpected"
This is what will bring inflation down, but it’s going to be painful for a lot of people. Best thing would be to go back in time and not pass the ARP in spring of 2021.
I would say to the chorus of sarcastic “unexpected” mockery, “If it’s so easy to get these numbers right every time, you should go into the business because you would make a whole lot of money if you’re always right.”
My grocery bills are 30% higher than 18 months ago.Diesel (I drive a diesel) is almost 3 times what it was 18 months ago. My home is probably worth 20% less than it was 18 months ago. My electric rate (my home has electric heat and A/C) is 50% higher than it was 18 months ago.And my current income is about 4% higher than it was 18 months ago.
Could Americans be any worse off without the Fed?
They don’t know what they are doing. They cause problems and destroy the economy to”save” it. Then they move the goal posts and cherry pick so they can claim they accomplished something.
Why are Americans letting these unelected incompetent boobs destroy American prosperity?
Bad news is good news, I guess.
U.S.
DJIA 32,333.93
+300.65
S&P 500 3,825.58
+18.28
NASDAQ 10,858.78
+66.11
Ok, so how about this magnitude of miss?
A friend of mine wanted to start flipping houses back in 2006 or so. He was going to build up his credit so he could buy multiple houses at the same time.
I told him housing prices were far more expensive relative to personal income than was historical. It was going to crash.
He said this time is different. The market is going up and will never go back down. Up up and away! The sky’s the limit! To the moon!
Last year I was talking to a young realtor. She’d been in the business for about a year. She said the housing prices were reflecting a “new normal” because this time it’s different.
I told her housing prices were far more expensive relative to personal income than was historical. It was going to crash.
Then she informed me the market is going up and will never go back down. Up up and away! The sky’s the limit! To the moon!
Probably about 20-30 years from now people will be saying the exact same thing again.
Maybe sales will decline less when sellers are willing to roll back some of the 30%+ recent gains in home selling prices. The market was way overheated and now needs to return to some sanity.
High inflation, high interest rates, energy shortages, incomprehensible, irrational byzantine restrictive rules and regulations and high taxes all lead to severe economic contraction in almost all sectors. Yep. Biden and his globalist green lunatic cabal did that in less than two years.
Nailed it.
Oops! It looks like someone forgot to “adjust” the data to make it look like home sales actually increased.
C’mon man!
Good question.
I expect some of it has something to do with the fed always being the familiar status quo within most citizen’s lifetime. And maybe some variant of normalization bias. Maybe.
Why buy now if the price is going to be lower (on what may be the biggest purchase in someone’s life) in the next 6-12 months?
I have two degrees in economics, but like everyone else, we can define inflation, like obscenity, when we see it.
For me a benchmark is the cost of a 35-can pack of Coke Zero at Costco. During the depths of Covid they were priced at $12.19 and increased gradually until early September of this year when it was $14.19. I go on vacation for 3 weeks recently and come back to $17.19. This is palpable, gut-level inflation.
Everyone will have a particular indicator, a staple item for which the price level is easily remembered. This is the inescapable, omnipresent, definitive bad news for Democrats. You cannot mismanage the economy and do this to people and expect them not to notice. Whatever else Democratic campaign consultants may have been selling, there exists no words or music that will distract voters from what they know on a gut level. Their candidates are forked.
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