Existing Home Sales scheduled to be released at 10am; look for the usual seasonal strength, and improving but weak year over year numbers.
In light of this data, the WSJ’s Ahead of the Tape column looks at the Housing Market. Their conclusion? Do not confuse the end of the tailspin for actual strength.
“A survey conducted in June of 1,500 real-estate agents sponsored by the trade publication Inside Mortgage Finance found that 36% of all sales involve “nondistressed” properties. Of the nondistressed sales, only 31% were what the survey described as “unforced or optional.” The rest were sales by homeowners in some kind of financial or personal crisis . . .
Meanwhile, the Mortgage Bankers Association said Thursday that the number of homeowners behind on their mortgage payments hit a new high during the second quarter, with more than one in eight homeowners delinquent or in the foreclosure process.
So it is likely that sales will stay mired on the low end of the housing barbell . . .”
Two other factors the article pointed out:
1) Two-thirds of home sales are either foreclosures or banks taking a loss on the mortgage. The remaining one-third (~10% of overall sales) is what you might call “normal.” (That 2/3rds number seems rather high even to me)
2) In July 2008, sales of existing homes hit a five-month high, and the NAR called a “sustained upturn coming.” Once agian, their forecasting prowess was proven to be non existent . . .
Improving Home Sales Belie Market Reality