Posts Tagged ‘New Home Sales’

Burning Down the House; New Home Sales Consensus 330K, Actual 276K, a Record Low; Nationwide, Zero New Homes Sold Above 750K

Burning Down the House; New Home Sales Consensus 330K, Actual 276K, a Record Low; Nationwide, Zero New Homes Sold Above 750K

Courtesy of Mish 

I failed to comment yesterday on the huge miss by economists on consensus new home sales, but Rosenberg has some nice comments today in Breakfast with Dave.

Burning Down the House

Once again, the consensus was fooled. It was looking for 330k on new home sales for July and instead they sank to a record low of 276k units at an annual rate. And, just to add insult to injury, June was revised down, to 315k from 330k. Just as resales undercut the 2009 depressed low by 15%, new home sales have done so by 19%. Imagine that even with mortgage rates down 100 basis points in the past year to historic lows, not to mention at least eight different government programs to spur homeownership, home sales have undercut the recession lows by double-digits.

in the aftermath of a credit bubble burst and a massive asset deflation, trauma has set in. The rupture to confidence and spending from our central bankers’ and policymakers’ willingness to allow the prior credit cycle to go parabolic has come at a heavy price in terms of future economic performance. Attitudes towards discretionary spending, credit and housing have been altered, likely for a generation.
The scars have apparently not healed from the horrific experience with defaults, delinquencies and deleveraging of the past two years — talk about a horror flick in 3D. The number of unsold homes on the market exceeds four million and that does include the shadow bank inventory, which jumped 12% alone in August, according to the venerable housing analyst Ivy Zelman.

Nearly 1 in 4 of the population with a mortgage are “upside down” and as a result are now prisoners in their own home. We have over five million homeowners now either in the foreclosure process or seriously delinquent. The government’s HAMP program was supposed to bail out between 3 and 4 million distressed homeowners and instead we have only had a success rate of fewer than half a million.

Now back to the new home sales data. Every region in the U.S. was down, and down sharply. The homebuilders did not cut their inventory levels and as a result, the backlog of new homes surged to 9.1 months’ supply from 8.0


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New Home Sales Skew to Low-End

New Home Sales Skew to Low-End

Courtesy of Jake at Econompic Data

Bloomberg detail:

Sales increased 0.7 percent to a 429,000 annual pace, less than anticipated, figures from the Commerce Department showed today in Washington. The worst housing slump since the Great Depression may be drawing to a close as first-time buyers rush to take advantage of tax credits before a November deadline. Federal Reserve policy makers this week pledged to keep borrowing costs low to sustain the recovery past the time when the government stimulus measures wane.

“At least we continue to see an upward trend in place,” said Ellen Zentner, a senior economist at Bank of Tokyo- Mitsubishi UFJ Ltd. in New York. “New-home sales are battling existing-home sale prices, which are incredibly attractive with the foreclosure pricing.”

Below is a chart showing how the new home market has dramatically shifted to the lower end market )or is it just that the values have shifted there due to lack of demand?).

new home sales breakdown

Source: Census

 


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New Home Sales in Perspective

New Home Sales in Perspective

Courtesy of Jake at Econompic Data

Stabilization? Yes.

But, I’m surprised by the surprise. By that I mean did the market think new home sales would keep declining at that torrid pace? If so, that would have meant negative sales at some point in the near future… not exactly possible.

new home sales

We’re still at levels last seen in 1979. A time at which the U.S. population was roughly 80 million people smaller.

So… good news? Yes, but I wouldn’t argue that this means the worst in overall housing is definitely behind us.

Source: Census

 


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WHAT’S ON TAP?

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WHAT’S ON TAP?

Courtesy of The Pragmatic Capitalist

This is the biggest week of the quarter in terms of earnings.  29% of the S&P 500 will be reporting and 750 companies in total report.  The docket is loaded with energy and materials firms.   Adding to this is a heavy slate of economic news:

  • Monday: New home sales
  • Tuesday: July Conference Board Consumer Confidence, S&P/Case-Schiller Home Price Index
  • Wednesday: June durable goods orders, Federal Reserve Beige Book, weekly crude inventories
  • Thursday: weekly initial jobless claims
  • Friday: Advance Q2 GDP, July Chicago PMI

The government is auctioning off an incredible $115B in short-term notes next week.  This could create the risk of higher yields and a skittish stock market.  At some point the demand for bonds is going wane and  yields are going to spike.

The risks in this market are rapidly increasing.  There is a deep feeling of complacency in the market.  The latest AAII sentiment reading came in at 38 – a fairly neutral reading, but up substantially in the last two weeks.  Meanwhile the recent rally has been on very low volume and very questionable fundamentals:

 

bberg

 

The rapid decline in the VIX and Yen also have me feeling a bit uneasy about the current move.  The majority of the strong tech firms and banks have released earnings.  Now we’re moving into the real economy names – energy, materials and consumer related names.  I don’t expect the news to be nearly as good as we get deeper into the earnings season.  We’re also moving into a seasonal period that is very weak for the stock market.  Investors always try to anticipate the scary month of October by getting out in September.  We could see a repeat this year, especially considering the disaster we saw last year.  This is a fast moving market.  I’ll adapt with it, but for now, I am standing pat on my bullish stance with the expectation of short sellers capitulating at some point in the next week or so.  That will be your chance to move to a neutral position or get short.  Stay tuned.

 


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Good News On Durable Goods Not Such Good News On New Home Sales

Courtesy of Tom Lindmark at BUT THEN WHAT

Good News On Durable Goods Not Such Good News On New Home Sales

I guess the meme that said we need to see housing rebound before we really start pulling out of the durable goods, new home salesrecession has been put on the shelf. A lackluster new home sales report for May was overshadowed by the durable goods report. The news is pushing up equities across the board.

Here is the news from the NYT on durable goods:

The Commerce Department said demand for durable goods rose 1.8 percent last month, far better than the 0.6 percent decline that economists expected. It matched the rise in April, with both months posting the best performance since December 2007, when the recession began.

Orders for non-defense capital goods, a proxy for business investment plans, rose 4.8 percent, the biggest increase since September 2004. That could signal that businesses have stopped trimming their investment spending.

The back-to-back monthly gains in orders for durable goods — items expected to last at least three years — were further evidence that a dismal stretch for manufacturers may be nearing an end. But analysts say any sustained rebound is months away.

“This is a pretty good report and welcome news in the hard-pressed (capital expenditure) sector,” M. Cary Leahey, an economist at New York-based consulting firm Decision Economics, wrote in a research note.

And also from the Times, the info on new home sales:

Still, new new-home sales dropped 0.6 percent in May to a seasonally adjusted annual rate of 342,000, from a downwardly revised April rate of 344,000. Economists had expected a sales pace of 360,000 last month, according to Thomson Reuters. Sales were down nearly 33 percent from May last year.

The median sales price, $221,600, was down 3.4 percent from a year earlier but up 4.2 percent from April.

It’s probably a good idea to keep the durable goods order report in perspective. It’s a very volatile number, subject to significant revisions as well as wild month-to-month fluctuations. It’s nice to see an upward trend but part of it could be due to inventory rebuilding rather than strong end-user demand. Don’t get too excited.

 


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Mortgage Delinquencies Hit Record High, New Home Sales Disappoint

Courtesy of Tyler at Zero Hedge

Mortgage Delinquencies Hit Record High, New Home Sales Disappoint

Green shoots spinning in their grave – 12 percent of homeowners with a mortgage are behind on their payments or in foreclosure. Half of all adjustable-rate loans to borrowers with shaky credit were past due or in foreclosure. And we still have to see the Option ARM hurricane. California, Nevada, Arizona and Florida accounted for 46 percent of new foreclosures in the country.

Also new home sales rise to a below consensus 0.3%, "up" from a majorly downward revised March decline of -3.0%.

Amusingly, homebuilder confidence climbed to an eight-month high in May. Mortgage applications to purchase homes are also up 9 percent from February’s nine-year low. We shall see how confidence fares now that mortgage rates are at pre QE levels.

 


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Animal Spirits: The Absence of Stuff

 

Animal Spirits: The Absence of Stuff

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Zero Hedge

Deutsche Bank CEO Vows To Make "Tough Cutbacks" As Shares Slump To Record Low

Courtesy of ZeroHedge. View original post here.

Watching Deutsche Bank shares crash to new all-time lows (around €6.35 $7.07) just as the troubled German lender's annual shareholder meeting was getting underway in Frankfurt on Thursday, we could hardly imagine anything more appropriate. Actually, that's not true - there is one thing: The revelation, just hours before the meeting's start, that a 'software glitch' had blocked reporting of suspicious transactions for years.

With DB's brand mired in controversy thanks to Congressional subpoenas that have drawn attention ...



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Kimble Charting Solutions

DAX (Germany) About To Send A Bearish Message To The S&P 500?

Courtesy of Chris Kimble.

Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!

This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.

It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).

After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S...



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Insider Scoop

55 Biggest Movers From Yesterday

Courtesy of Benzinga.

Gainers
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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

Reminder: We are available to chat with Members, comments are found below each post.

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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