Morning Report: Existing Home Sales fall

Vital Statistics:

  Last Change
S&P futures 4,367 23.2
Oil (WTI) 71.62 1.19
10 year government bond yield   1.33%
30 year fixed rate mortgage   3.07%

Stocks are higher this morning as fears over an Evergrande contagion fade. Bonds and MBS are flat.

 

The Fed decision is due at 2:00 pm today. No changes in interest rates are expected, although there is the possibility we could see an announcement regarding decreased asset purchases (tapering). We will also get a press conference and new projections.

 

FedEx reported earnings this morning which came in lower than expected. Check this statement out in the press release:

First quarter operating results were negatively affected by an estimated $450 million year over year increase in costs due to a constrained labor market which impacted labor availability, resulting in network inefficiencies, higher wage rates, and increased purchased transportation expenses. This was partially offset by higher package and freight yields, increased international export express shipments and a favorable net fuel impact. In addition, while commercial ground and U.S. domestic express package volume increased year over year, continued supply chain disruptions have slowed U.S. domestic parcel demand compared to the company’s earlier forecast.

The stock is down 7% this morning. I wonder if this is going to be a theme when companies start reporting third quarter numbers in about a month.

 

Mortgage applications rose 4.9% last week as refis increased 7% and purchases rose 2%. “There was a resurgence in mortgage applications the week after Labor Day, with activity overall at its highest level in over a month, and purchase applications jumping to a high last seen in April 2021,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Housing demand is strong heading into the fall, despite fast-rising home prices and low inventory. The inventory situation is improving, with more new homes under construction and more homeowners listing their home for sale. Despite this week’s increase, purchase applications were still 13 percent lower than the same week a year ago.”

 

Existing home sales fell 2% in August, according to the National Association of Realtors. Existing home sales came in at an annualized pace of 5.9 million, which was down on both a month-over-month and year-over-year basis. “Sales slipped a bit in August as prices rose nationwide,” said Lawrence Yun, NAR’s chief economist. “Although there was a decline in home purchases, potential buyers are out and about searching, but much more measured about their financial limits, and simply waiting for more inventory.”

The median home price rose 15% to $356,700, as inventory remains an issue. Speaking of inventory, we had a 2.6 month supply of unsold homes, which is well below a balanced market, which has about 6 months’ worth. First time homebuyers slipped to 29% which is another indication that people are getting priced out of the market.

31 Responses

  1. Great non political read:

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  2. Welp — one weekend visiting the un-vaxxed in-laws and what do get for it.
    positive COVID test. didn’t feel well Tuesday night, took an at-home test Wednesday. Confirmed that positive result with a test at my doctor’s office. feeling okay, but totally disruptive for the next 10 days or so. son can’t go to school. weekend camping trip canceled. dentist appt. canceled. ugh. and i’m basically confined to quarters.
    takeaway — get ht vaccine and never visit the in-laws.

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    • That sucks NoVA, sorry. Which vaccine did you get? The in-laws tested positive too I assume?

      Also, does this give you something to hold over the wife in the future?

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      • i got the Pfizer. last dose in April.
        if this were pre-covid, the way i’m feeling, i’d probably be in the office today.

        and, no, they are of course fine. they’ve been going to a local casino out there, eating out, not doing anything to mitigate their risk

        but, yes, i have some leverage for future issues.

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        • They are unvaxxed, feel fine and tested positive?

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        • no, they are unvaxxed, feel fine, and have not been tested to my knowledge. so, i suppose it’s possible they have it.

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        • I have to admit to being somewhat confused when vaccinated people catch covid and then blame unvaccinated people for it. Shouldn’t they be blaming the makers of the vaccine? If the vaccine didn’t protect them from getting it, why do they think it would have protected the unvaccinated person?

          The world has gone mad.

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        • Ideally, there wouldn’t be any blame–as it is not a reasonable position to expect the first iteration of a vaccine, not to mention a first iteration of a vaccine that is not a vaccine but a gene therapy, being applied globally in a way that has never happened in the history of humanity.

          No reason to blame the vaccine makers–that all turned out about as well as anyone could rationally expect, and honestly probably far better.

          In the same vein, those who are vaccinated who get COVID, the vast majority of them do fine. No or few symptoms, quick recovery, very little death or hospitalization–again, a win.

          But it’s not the fault of the unvaccinated either, most of whom actually don’t have COVID at any given time and a lot of transmission of breakthrough cases is happening between vaccinated people–who, of course, turn out fine, because they were vaccinated.

          And there chances of getting it even if everybody was vaccinated is still reasonably good. If we’re going to blame anybody, we probably ought to be blaming the Wuhan Labs, the experts trying to cover that up, the folks thinking “gain of function” research is an awesome idea, Fauci for emphasizing prevention over treatment, everyone going off against hydrochloroquine and invermectin, the US government rationing monoclonal antibody treatments to punish red states, and so on. Lots of blame to go around there, but I don’t see a rational argument for applying much blame to vaccine manufacturers or the unvaccinated. Neither are the problem in this case, IMO.

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        • KW:

          No reason to blame the vaccine makers

          To clarify, my point wasn’t really that anyone should blame vaccine makers, but rather that if one is looking to blame someone, it makes a lot more sense to blame vaccine makers than the unvaccinated. There is a distinct Alice-In-Wonderland quality to thinking that the very thing which, when injected directly into you, failed to prevent you from getting Covid, somehow would have prevented you from getting Covid if injected into someone else. It boggles the mind.

          As I said, our world has gone mad.

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        • it’s simple. the unvaccinated are allowing this to continue to spread. more vaccinated people, less avenues. fewer unvaccinated people, more avenues. so yes, i hold them entirely resposible.

          edit — not entirely. it more my fault for agreeing to see them

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        • nova:

          it’s simple. the unvaccinated are allowing this to continue to spread.

          Let’s take your presumption as fact, ie that your in-laws were indeed infected, and that they passed it to you.

          You are vaccinated, and you got it. Given that fact, why do you think that if your in-laws had the exact same vaccination, ie the very one that didn’t protect you, they wouldn’t have gotten it?

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        • it appear you are challenging the concept of herb protection vis a vis vaccination?

          their status as individuals is less the issue.
          they won’t’ even get tested, so I can’t say that I got it from them. but they’re contributing to the rickey nature of the overall situation.

          it’s basically a fence. each vaccinated person adds a plank. it’s not impermeable, but more vaccinated people, more planks. stronger fence. not 100% secure. but stronger. there’s a weak point someone that can and will be exploited,

          I got it because our fence sucks. I’m holding up a plank, but the people to the left and right of me are not.

          or, perhaps in terms of a Roman phalanx. I have my shield up, but the person to my left and right don’t. and dumb luck the arrow hits me and not them. the idea that a vaccine is going to prevent all infections is flawed. but if they had their shields up? i still might get hit, but the odds are better that i won’t.

          to continue with this analogy, my shield did protect me so, and it’s just a flesh wound.

          my contention is that i would have less of a chance of getting ill at all if more people add their fence/shields in place.

          that said, perhaps you’re right that this particular vaccine is garbage
          I’ll consider that. but I don’t think that’s the case.

          but, i still would not support mandates. counterproductive IMHO

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        • I didn’t write that the vaccine is garbage merely that it’s primary function is to amerliorate the symptoms rather than to prevent infection. It wasn’t sold as such but it’s obvious now that is the case. As such, the fence analogy is wrong, it doesn’t matter if you took the shot in terms of infection, so it doesn’t matter if planks exist or not.

          As for mutations, they’ll exist as long as there are humans, it’s the nature of the corona virus (the common cold is a corona virus) and there isn’t anything to stop it.

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        • Your pretty sure the infection came from the inlaws?

          Edit: never mind, answered above.

          I’m on the opposite side of the vaccine debate. I had gotten J&J back in March, and then got Monderna on top of that earlier this month when the new results came out. It should have been sold as a luxury good rather than doled out by the government if they wanted more people to get it.

          Of course, everyone conveniently forgets how last year it was people like Andrew Cuomo and Joy Ann Reid who were publicly skeptical of taking any “Trump vaccine” since his CDC and FDA were “politicized”.

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        • “Of course, everyone conveniently forgets how last year it was people like Andrew Cuomo and Joy Ann Reid who were publicly skeptical of taking any “Trump vaccine” since his CDC and FDA were “politicized”.

          yeah. they screwed this up too.
          I sometimes have a blind spot for “listening to politicians” I don’t and forget the others do.

          my social circle was one where it was race to get vaccinated. and i spent time administering them. so that’s my bias. which i suppose i should be upfront about.

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        • “It wasn’t sold as such but it’s obvious now that is the case. As such, the fence analogy is wrong, it doesn’t matter if you took the shot in terms of infection, so it doesn’t matter if planks exist or not.”

          this is an interesting point.
          should the messaging have been: this will keep you alive.

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        • I think the better message would have been “This will keep you out of the hospital”.

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        • “my social circle was one where it was race to get vaccinated. and i spent time administering them. so that’s my bias. which i suppose i should be upfront about.”

          Ditto. But we are also those libertarians who signed up for Global Entry too so go figure.

          Freedom is not having to stand in line.

          Ultimately, I think the issues with vaccine adoption is a result of the collapse of the credibility of those in authority and elites. It’s mostly entertainment until something important comes along like a pandemic.

          I think back in the day, we both stated the position that the only federal government agencies worth funding were the military and the CDC because invasion and pandemics were the only legitimate justifications for coerced collective action.

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        • yep. CDC and the Navy.
          I’m just frustrated because i’m stuck in the basement bedroom for the next 10 days, my son can’t go to school, I have to facetime with my wife, etc.

          are we at serious risk of illness. no. but the VA Department of Health knows im positive, and i don’t want anyone else to get this — vaccinated or not — because of both the physical and societal ramifications.

          and yes, i’m bitter that i did everything “right” (mostly) and my in-laws purposely did not. with the caveat that i can’t say i got it from them, i did get it from their community … ocean city during bike week. i went into the danger zone and got burned. so, maybe scott is right. its my fault.

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        • nova:

          so, maybe scott is right. its my fault.

          Just to be clear, I am not saying it is your fault, or anyone else’s. Apart from perhaps blaming those responsible for the Wuhan Lab and it’s financial backers in gain of function research, I don’t see the point in blaming anyone. The disease is here, it isn’t disappearing regardless of the level of vaccine hesitancy, and we just have to learn to deal with it, hopefully with less panic and fear-mongering than we have to date.

          My only point was the fundamental illogic in this notion that people who won’t get a vaccine that doesn’t actually stop people from getting covid are this unique danger to people who have gotten the vaccine that, again, doesn’t actually stop anyone from getting covid.

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        • “My only point was the fundamental illogic in this notion that people who won’t get a vaccine that doesn’t actually stop people from getting covid are this unique danger to people who have gotten the vaccine that, again, doesn’t actually stop anyone from getting covid.”

          wait. that’s not illogical. that’s how vaccines work.
          maybe a unique danger is a step too far. but, its also too far to not hold the unvaccinated accountable at all either.

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        • wait. that’s not illogical. that’s how vaccines work.

          That’s only true if the vaccine prevents infection. Do you believe that?

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        • Vaccines in general don’t operate to prevent infection (although as a practical matter, many do, though not necessarily with 100% efficacy). But the mechanism is to boost your immune system so that it’s primed to attack a given infection should you become infected. Could be it doesn’t boost it enough to completely prevent infection or contagion, but does boost it enough to keep you from dying or ending up on the hospital.

          But the “blame the unvaccinated” thing is a fantasy, IMO. It’s predicated on the notion there’s a world where experts and super-smart politicians can control exposure to a virus through their super-smart policy and that’s not rational.

          It’s more religious in nature. The reality is almost everybody has a high chance of being exposed to the virus at some point. The goal should not be to prevent exposure but to prevent hospitalization and death. This is accomplished through vaccination and treatments (like invermectin or Regeneron).

          But smarty-pants think that they can outthink a virus and should ALSO micromanage the distribution of treatments and because they are so smart that will make things better.

          They will not.

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        • nova:

          that’s not illogical. that’s how vaccines work.

          I don’t understand.

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        • Just curious, places like Westchester NY are requiring even vaccinated people to wear a mask indoors, and more or less started 5 – 6 weeks ago.

          Is there any data showing they are getting better results than everywhere else?

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        • Well it’s doubtful, generally. Mask mandates went in place here at the same time but while most people are still wearing them in the store (and you “have” to but I’m always seeing someone who isn’t, but most people are—but it’s not like the outset where the stores were really enforcing it). But anywhere you know the mask mandate is going to be ignored you see people who go around maskless all the time (me) and people who wear it like a chin diaper or off one ear most of the time, and people who wear them all the time. So it’s a mixed bag and it would be impossible to say if a reduction or spike had anything to do with masking.

          Almost nobody at the gym wears a mask.

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        • Worst thing was the pandemic response getting caught up in the politics of “Orange Man Bad”.

          One point that I don’t think is being debated clearly is that if the vaccine lowers the risk of death or serious disease to much lower level, then the cost/benefit calculations of restrictive measures should presumably change too, but that doesn’t seem to be part o f the discussion. The whole reason COVID was treated differently than the flu to begin with was the comparative mortality rate.

          Instead, the unstated goal seems to be complete suppression of COVID which I don’t think will ever happen and thus provides a perpetual justification for restrictions for those who wish to continue them.

          Edit: Good read on the whole vaccinated vs unvaccinated transmission issue.

          https://www.theatlantic.com/ideas/archive/2021/09/the-vaccinated-arent-just-as-likely-to-spread-covid/620161/

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        • jnc:

          Good read on the whole vaccinated vs unvaccinated transmission issue.

          Interesting to me that virtually none of these analyses ever include those who were infected and recovered.

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        • Science + Politics = Politics.

          And the SS “We’re All In This Together” sailed in the summer of 2020 when some gatherings were enthusiastically applauded and others shamed based on nothing more than political ideology.

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        • That’s only true if the vaccine prevents infection. Do you believe that?

          it reduces but does not eliminate the chance of infection.

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        • “And the SS “We’re All In This Together” sailed in the summer of 2020 when some gatherings were enthusiastically applauded and others shamed based on nothing more than political ideology.”

          This.

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