U.S. Existing Home Sales Plummet

The secular trends in housing relative to some headline interpretations, mostly MOPE, inescapably leads to the following quote from Dean Wormer from Animal House (1978),

0.2... Fat, drunk and stupid is no way to go through life, son.

Do not stick your head in the sand in regards to real estate. As I suggested in my commentary entitled 15 Signs The U.S. Housing Market Is Headed For Complete And Total Collapse,

Words like total collapse and dying tends to be associated with the "selling of fear". This label, in turn, can lead to instant discredit or laughable denial.

The cyclical low in housing is not due for years (decades). While the urge to stand with crowd is strong, it's rarely profitable to do so. As the above headline suggests, home sales remains extremely weak. The months supply (turnover relative to supply), which excludes a large shadow inventory, confirms this trend and illustrates the work to be done before the cyclical low.

Months Supply And Change YOY


Expect more pain and corresponding "save me" stimulus in the years to come.

Sales of U.S. previously owned homes plunged 27 percent in July, twice as much as forecast, evidence foreclosures and limited job growth are depressing the market.

Purchases plummeted to a 3.83 million annual pace, the lowest in a decade of record keeping and worse than the most pessimistic forecast of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed today in Washington. Demand for single-family houses dropped to a 15- year low and the number of homes on the market swelled

Source: bloomberg.com