By Dr Denver H. Bubble
Welcome back readers, after cleaning out our database from the trash the Russian hackers spammed us with we are back to writing! As we pick up, the worrying trends in the housing markets continue on their downward slope, this time in the pending home sales numbers.
Pending home sales declined in August, dropping 1.8% month over month and fell 2.5% year over year. This decline was almost four times worse than expected showing the surprising weakness in home sales in the market that economists continue to miss. Home sales fell its lowest level since Oct 2014. This is the fourth month of annual declines in a row all occurring during the normally busy late spring and summer season.
The decline in home sales, which was broad-based across all four regions but strongest in our home region the West, shows that higher mortgage rates, rising prices and a shortage of affordable homes continue to squeeze buyers. The revisions to new-home sales data showed a slower market than thought, according to previously released metrics.
Our friend, Larry Yun of NAR, chimed in saying, “The greatest decline occurred in the West region where prices have shot up significantly, which clearly indicates that affordability is hindering buyers and those affordability issues come from lack of inventory, particularly in moderate price points.” On a non-seasonally adjusted basis, sales in our home region the West collapsed 9.9% year over year. We will continue to monitor the upcoming September data release to see if the trends hold and continue to show a housing market bubble deflating.
Image source: Zerohedge