Did Reports on New Homes Sales Bury the Lede?

[Anonymous]

'Compared with a year earlier, sales of new homes were down 4.2%. The median price of a home remained elevated at $275,800.'

New Home Sales Rise 6.4% in April

http://online.wsj.com/news/articles/SB10001424052702303480304579579860055701886

They lead with the 6.4% rise in April vs March, but way down you see year over year is down. Isn't the year over year much more important in terms of trend and performance of the market?

And this rise was after a larger drop the month before, so more of a return to middling performance than a real jump.

http://www.bloomberg.com/news/2014-05-23/sales-of-new-u-s-homes-increased-6-4-in-april-to-433-000-pace.html

Are things going to turn around is housing stalling? We are moving and were thinking of renting out our place (but it's cash flow negative by a few hundred bucks a month); will its value start dropping too and we should sell now??

[Anonymous]

LOw inventory

[Anonymous]

Anonymous wrote:LOw inventory

But why no new homes? Prices are high so what holding builders back.

[Anonymous]

Anonymous wrote:

Anonymous wrote:LOw inventory

But why no new homes? Prices are high so what holding builders back.

just like buyers, builders are having difficulty getting loans as well. add to that, sellers who can now sell due to appreciation in their home are not able to find a new home to move to so they are choosing to stay put.

its a very strange time indeed. never seen a scenario like this before.

[Anonymous]

I would also venture that many current buyers who are now entering the market are lower quality borrowers. Those who had the cash and flawless credit rating to buy in 2009-2011 have their place and are staying out. Those folks were easy money to the banks. Lower quality borrowers are taking longer to vette, get approved, and settled. There's no easy buck here.

And yes, that headline definitely buried the lede, lol.

[Anonymous]

No, I don't think they buried the lead. Bloomberg, as a rule, doesn't bury leads on financial stories.

A year ago is kind of an eternity in the housing market, anyway. I'm not sure what YoY tells you.

Also, these are new homes. The existing homes results are usually more telling and interesting.

[Anonymous]

"Some of the housing price rebound experienced in recent years has been driven by bottom feeding by institutional investors snapping up distressed properties to repackage as rentals, say Louise Keeley and Kathy Botjancic in “A Tale of 2000 Cities.” That force has largely played itself out. The prime driver now is household formation, which should snap back to 1.3 million net new households yearly, the report says.

Overall, housing construction will remain restrained. And the housing type will shift:

In every state … the number of single-family home completions will remain below the previous peak over the five-year period. This is to be expected, given that speculative fever pushed single-family housing construction well above what the underlying fundamentals could support over the longer term. By contrast, completions of multi-family homes will continue to rise in many states and remain at a higher share of total completions than pre-crisis, reflecting a shift in demand from owners to renters."

http://www.baconsrebellion.com
May 22,2014

[Anonymous]

Anonymous wrote:I would also venture that many current buyers who are now entering the market are lower quality borrowers. Those who had the cash and flawless credit rating to buy in 2009-2011 have their place and are staying out. Those folks were easy money to the banks. Lower quality borrowers are taking longer to vette, get approved, and settled. There's no easy buck here.

And yes, that headline definitely buried the lede, lol.

That's a weird assumption. I'm in the market now because I bought my last house 8 years ago and have outgrown it. We had no need for a new house in 2009-11. In any case, it is easier to get loans now than four years ago because the banks are further along in their recovery. It's lack of inventory, not lack of financing, that is limiting sales volum.

[Anonymous]

Anonymous wrote:No, I don't think they buried the lead. Bloomberg, as a rule, doesn't bury leads on financial stories.

A year ago is kind of an eternity in the housing market, anyway. I'm not sure what YoY tells you.

Also, these are new homes. The existing homes results are usually more telling and interesting.

Really? Housing is perhaps the most iconic seasonal market? YoY seems very relevant.

But new homes generally are green or brown development, in most parts of country. Infill tear downs are a tiny part of that and confined to urban areas. So new home sales should be able to respond rapidly to increased housing demand, yet YoY sales are down. Low inventory is not the problem, they supply can respond to demand, weak builders were flushed out and the remaining ones can get financing. is it a demand side? What is going on?

[Anonymous]

Anonymous wrote:I would also venture that many current buyers who are now entering the market are lower quality borrowers. Those who had the cash and flawless credit rating to buy in 2009-2011 have their place and are staying out. Those folks were easy money to the banks. Lower quality borrowers are taking longer to vette, get approved, and settled. There's no easy buck here.

And yes, that headline definitely buried the lede, lol.

Ha ha ha, well thank you! We got lucky to be able to afford anything, even at the bottom of the market, but I'll take the "cash and flawless credit" compliment.