Analyzing The New Homes Sales Report For September Released Today Will Show An Unexpected Spike Up
The existing home sales data series has become as erratic and unpredictable as the Census Bureau’s new home sales report. One can only wonder about the reliability of the National Association of Realtors reporting methodology when its Chief “Economist” repetitively states month after month that “job growth continues to hum along at a robust pace.” Any economist who uses the Census Bureau’s monthly employment report as their evidence that the U.S. economy is producing meaningful, income-producing jobs is either just another propaganda mouthpiece or is of questionable intelligence. Either way a statement like that is highly unprofessional.
You must be wondering why I’m connecting home sales to the recent data which shows that subprime auto loan delinquency rates are soaring (here and here). Let me explain.
All cash sales of existing homes in February were reported to be 25% of all sales in February, down from 26% in January. This means that 75% of existing home sales (93% of new home sales) are dependent on mortgage financing. The FHA has been underwriting 3.5% down payment mortgages since 2008. 3.5%…