The National Association of Realtors released its report today on June home sales, and most of the media focus seems to be on the disappointing 4.5% drop in existing-home sales from 4.62 million units in May (revised upward from 4.55 previously reported) to 4.37 million homes in June. For example, the WSJ reports that:
"Sales of previously occupied homes in the U.S. took an unexpected dip last month to the lowest level in eight months, a sign of weakness for a part of the economy that has been showing life."
But compared to June of last year, existing-home sales were up by 4.5%, which is the 12th consecutive month of an annual increase in units sold, following 11 months out of the previous 12 months of annual decreases in home sales. And here's some other positive news from the report about median-home prices:
The median-price for homes sold in June was $184,000, which is the highest level since September of 2008, almost four years ago (see chart above). Year-over-year, the median home price in June was almost 8% above last year, which was the largest annual increase since a 8.7% gain in February 2006. The June year-to-year increase in median price was the fourth consecutive increase, following 15 straight months of decreases. The last time there were four back-to-back months of annual increases in median home prices was in the spring of 2006, more than six years ago.
Note that when the Case-Shiller report on home prices comes out showing negative or weak annual increases in home prices, that's reported as a sign of housing market weakness. So now that median-home prices are close to a 4-year high, and showing the largest annual increase in more than six years, shouldn't that be reported as a sign of housing market strength and recovery?
Update: Mortgage rates fell again this week to new all-time record lows of 3.53% for the 30-year and 2.83% for the 15-year.
To what degree can these jump in home values be explained by government intervention in the market through the same organizations that screwed everything up in the first place... and by the Federal Reserve's monetary policy that is keeping interest rates far below what their prices would be in a free market?
ReplyDeletei'm not sure you can compare these price moves to CS.
ReplyDeletethe NAR data does not really compare like to like, so it can be heavily affected by mix shift.
it's median figure cannot tell a an increase in price from a shift to sales in nicer neighborhoods etc.
this jump could just be mix shift.
it looks like housing prices are recovering, but i think 8% looks high to be an apples to apples number.
Finally, another bubble (to go along with higher ed & municipal debt)!
ReplyDeletethe NAR data does not really compare like to like, so it can be heavily affected by mix shift.
ReplyDeleteThe NAR is not only the outfit that got the bubble and top completely wrong, but also has a massive vested interest.
Much better perspectives:
This Chart Proves The US Housing Recovery Will Be Local
http://www.businessinsider.com/see-how-your-housing-market-set-2012-7
RealtyTrac, CoreLogic Confirm Housing Bear Thesis: 85-90% of REO Being Held Off Market, Meaning “Tight” Inventories Are Bogus
http://www.nakedcapitalism.com/2012/07/realtytrac-corelogic-confirm-housing-bear-thesis-85-90-of-reo-being-held-off-market-meaning-tight-inventories-are-bogus.html
The making of a housing market – like a Hollywood set, housing inventory looks to be low only because that is what is being presented. Orange County foreclosure pipeline twice the size of non-distressed MLS inventory.
http://www.doctorhousingbubble.com/the-making-housing-market-sales-up-inventory-down-foreclosure-pipeline-healthy-2012/
Housing Checkup–Has the Market Finally Bottomed Out?
http://www.ritholtz.com/blog/2012/07/housing-checkup-has-the-market-finally-bottomed-out/
It's time for a rail traffic update.
ReplyDeleteOn the topic of mortgages:
ReplyDeleteMark Zuckerberg just refinanced his house for 1.05%.
given how little he managed to pay his underwiters, i think we can safely say that that zuck is pretty good at getting what he wants from financial firms.
ReplyDeleteFrom the WSJ today: Existing-home sales decreased 5.4% from a month earlier to a seasonally adjusted annual rate of 4.37 million, the National Association of Realtors said Thursday. It was the weakest report since October 2011, but sales were still 4.5% above the same month ...
ReplyDeleteI'm still wondering if potential home buyers are still finding it porblematic to float a home loan, does anyone know?
LOL...I was wondering how Mark would spin the terrible existing-home report. It did not take long to find out.
ReplyDeleteThis explains why often the data does not matter. People will always find a way to spin their narrative regardless of what reality is showing.
FNC released their May index data today. FNC reported that their Residential Price Index™ (RPI) indicates that U.S. residential property values increased 0.6% in May (Composite 100 index). The other RPIs (10-MSA, 20-MSA, 30-MSA) increased between 0.5% and 0.8% in May. These indexes are not seasonally adjusted (NSA), and are for non-distressed home sales (excluding foreclosure auction sales, REO sales, and short sales).
ReplyDeleteThe year-over-year trends continued to show improvement in May, with all four composite indexes down 1.8% to 2.1% compared to May 2011. For all the indexes, this is the smallest year-over-year decline in the FNC index since year-over-year prices started falling in 2007 (five years ago).
Read more at http://www.calculatedriskblog.com/#kmutHIBmqRMaTslB.99