Morning Report: Existing home sales rise 4/20/16

Stocks and bonds are flattish this morning on no real news.

Mortgage Applications rose 1.3% last week as purchases fell 0.5% and refis rose 2.6%.

Existing Home Sales rose 5.1% MOM to 5.33 million in March. The median home price rose 5.7% to $222,700. This puts the median house price to median income ratio at 3.9x, which is higher than its historical range in the 3.2x – 3.6x. There are 4.5 months’ worth of inventory, which was an uptick from the 4.4 months’ worth in February. Days on market fell to 47 however. Sales slowed at the $1 million + price points, which could be a reflection of the global economic slowdown. The number of first time homebuyers was steady at 30%. Historically, that number has been closer to 40%.

Given the weak housing starts data and the existing home sales data, we aren’t getting the breakout spring selling season that some had hoped for. We should get some important data points tomorrow when we get earnings results out of Pulte and Horton.

The weakness in housing starts remains a conundrum, given the demand for housing. Builders have pointed to a shortage of labor, but as Goldman Sachs points out, you aren’t seeing increases in wages in the construction sector, at least not yet. Interestingly, the average age of a construction worker is the highest ever, as young people are not entering the sector. The other issue: regulations, and lots of them. You would think that government would be interested in seeing more housing construction, because that is the difference between 2% and 3% GDP growth, but the only discussion of housing these days revolves around how hard to slug the originators.

Hillary Clinton and Donald Trump won convincingly in NY last night.

23 Responses

  1. Back from a long weekend and frist!

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  2. “Hillary Clinton and Donald Trump won convincingly in NY last night.”

    Danged New York values!

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  3. What do you think, George?

    When Texas Republicans assemble for their state convention next month, it’s possible they will debate whether Texas should secede from the United States.

    There’s almost no chance Texas Republicans will actually vote in favor of seceding, mind you — not least because most of the party wants nothing to do with this — but the fact we’re even mentioning secession and the Texas GOP convention in the same sentence suggests that the once-fringe movement has become a priority for at least some conservative grass-roots Texans.

    To be sure, that seems to be a relatively small group. The Texas secession movement says 22 out of the 270 county GOP conventions passed some kind of independence resolution this spring. A party official said he’d be surprised if that were the case, and the Houston Chronicle was able to confirm only 10 counties. But 10 is a lot more than the one county that passed an independence resolution in 2012.

    And are you managing to keep your head above water?

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    • I need to look into relocating to Texas.

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    • I’m on high ground so no worries for me.

      I cannot fathom why progressives would want Texas to stay in the Union. What does Texas’s presence provide progressives other than aggravation?

      Liked by 1 person

      • McWing:

        What does Texas’s presence provide progressives other than aggravation?

        It provides lots of people to bully around.

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        • Charles Murray’s quiz from 2012 copied from NPR:

          http://www.pbs.org/newshour/making-sense/do-you-live-in-a-bubble-a-quiz-2/

          I scored 62.

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        • Mark:

          I scored 62.

          I guess you are slightly less inside a bubble than the last time you took the test!

          I was a 45 back then.

          https://all-things-in-moderation.com/2012/07/25/4126/#comment-26267

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        • Thanks, Scott! I would not have expected such consistency from me. This time I sorted my Jimmie from my Jimmy. Remember that question from the previous go-around?

          About flushing illegals into the open – it may be more difficult to ID illegals in TX, NM, AZ, and CA than in CT. 45% of the legal population in the southwest is of MX ancestry.

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        • Mark:

          I got a 37 this time around. The only question I know I answered differently was the mass marketed beer question.

          About flushing illegals into the open – it may be more difficult to ID illegals in TX, NM, AZ, and CA than in CT. 45% of the legal population in the southwest is of MX ancestry.

          Fair point.

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        • 31 for me

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        • I’m a 48. I don’t think I took the test before. Or I don’t remember taking it.

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        • The highest scores are in the 30-39 range, with 40-49 being a close second. 20-29 and 50-59 seem about tied. There’s almost nobody in the 80-89 range. I feel like this suggests that it’s people on the outer edges that are actually “within the bubble” and are isolated from the mainstream. That is, people with 0-9 and 70-79 scores. That mainstream should be somewhere in the median, yes? And the median score was 40 and the average score was 40.

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        • 36

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        • I was a 36 as well. And I do my best to stay within my suburban bubble but it’s harder than it looks.

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        • yello:

          And I do my best to stay within my suburban bubble but it’s harder than it looks.

          If I answered the questions while excluding the years prior to my college graduation, my score would have been much lower. Most of my high value responses came from the conditions in which I grew up, not the ones I live in now. Although I do have one current characteristic that helps bump up my score: a secret weakness for the Waffle House. I go there every time I am south of the Mason Dixon line.

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        • The questions are delightfully stereotypical in their own way. Waffle House is an unalloyed public good. When I was stranded without electricity in college by a 4 inch Atlanta blizzard, I could still walk up the street to WH and get something to eat because all their appliances were gas.

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        • yello:

          The questions are delightfully stereotypical in their own way. Waffle House is an unalloyed public good.

          I totally agree on Waffle House. But it is true – and I mean literally true, not just in a somewhat true, hyperbolic sense – that every Waffle House I have been to has had at least one waitress who was in serious need of some dental work, usually involving missing teeth. I was in a WF in Myrtle Beach not two weeks ago, testing out the hypothesis, and sure enough, there she was.

          Is it still a stereotype if it is true?

          Like

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