For the fifth consecutive month pending home sales declined in America – with this month’s drop representing the largest year-to-year decrease since April 2011.
Awesome, right?
“We could rebound a bit from this level, but still face the headwinds of limited inventory and falling affordability conditions,” said Lawrence Yun, chief economist for the National Association of Realtors. “Job creation and a slight dialing down from current stringent mortgage underwriting standards going into 2014 can help offset the headwind factors.”
Yes … assuming there is job creation (and not just lower unemployment rates due to people leaving the workforce).
FITS has been consistently calling out the housing “recovery” – and this latest data (along with the less-than-optimistic outlook for 2014) is further evidence our concerns are well-placed.
Adding to the volatility for 2014? More than 1800 pages of new government regulations imposed by Washington D.C.’s latest alphabet soup bureaucracy – the Consumer Financial Protection Bureau (CFPB).
“New mortgage rules in January could delay the approval process,” Yun acknowledges.
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“We could rebound a bit from this level, but still face the headwinds of limited inventory and falling affordability conditions,” said Lawrence Yun, chief economist for the National Association of Realtors.
Maybe the limited inventory and falling affordability conditions in some areas are due to investors purchasing properties, often with cash, and pricing Mom & Dad out of the market. Capitalism @ work.
Families Blocked by Investors From Buying U.S. Homes
http://www.bloomberg.com/news/2013-10-24/families-blocked-by-investors-from-buying-u-s-homes.html
Oct 24, 2013 10:10 AM ET
[Excerpt}
Home purchases by institutional buyers reached a record high in September and all-cash buyers accounted for almost half of sales as investors responded to rising demand from renters.
Institutional purchases accounted for 14 percent of sales, according to a report today
from RealtyTrac. That was the highest share since the real estate data firm began in 2011 to track transactions by that group, which it defines as buyers of 10 or more homes a year. All-cash sales rose to 49 percent from 40 percent in August and 30 percent a year earlier, a sign that rising mortgage rates since May have kept some people out of the market and that smaller investors are stepping up purchases.
“Both investors and traditional buyers are trying to snap up cheap homes before prices go higher, but the investors have the advantage of paying cash and not having to go through a convoluted mortgage process,” said Michael Hanson, a former Federal Reserve economist now working for Bank of America Corp. in New York. “People are being bid out of some markets because of investor demand.”
The problem of instability is greatly enhanced by speculators. You’ll note that they’re not buying homes in Detroit, where you can buy an entire residential block for under 15k. They’re buying where values are still relatively high, and artificially overpriced thanks to ‘if you like it…’ spending by the fed.
This causes huge instability in the markets by creating reasonable fears in those of us that want to buy, but are afraid our homes will be yanked out from under us do to fed policies and Obutthead’s inability to cease its over regulation.
So, what’s your point? Who do you blame for this stall in the housing recovery? Surely, you have someone in mind.
(Apologies for calling you Surely.)