Morning Report: Existing home sales rise

Vital Statistics:

  Last Change
S&P futures 4,636 -5.2
Oil (WTI) 71.37 0.18
10 year government bond yield   1.45%
30 year fixed rate mortgage   3.33%

Stocks are flattish as investors start getting ready for the Christmas holiday. Bonds and MBS are down small.


Third quarter GDP was revised upward to 2.3% as consumption was increased to 2%. Fourth quarter GDP estimates are a lot higher. Separately, the economy decelerated in November, according to the Chicago Fed National Activity Index.


Existing home sales rose 1.9% to 6.46 million, according to NAR. The median home price rose 13.9% to $353,900. Current housing inventory is down 13% to 1.1 million, or about a 2.1 month supply at the current pace. This represents a highly imbalanced market – six months is roughly a balanced market.

“Determined buyers were able to land housing before mortgage rates rise further in the coming months,” said Lawrence Yun, NAR’s chief economist. “Locking in a constant and firm mortgage payment motivated many consumers who grew weary of escalating rents over the last year.

Yun’s point is important – rents have been increasing at a fast clip, rebounding after the foreclosure and eviction moratoriums of the COVID pandemic. FWIW, NAR does see rates rising, with the 30 year fixed rate mortgage rising to 3.7% by the end of next year.

NAR forecasts that home prices will rise 5.7% as rates rise. Like the MBA and Corelogic, they forecast that home price appreciation has been pushed as far as it can. IMO they are downplaying the effect of rising wages, and that will be a powerful increase in buying power – much more important than interest rates.


Mortgage applications decreased by 0.6% last week as purchases fell 3% and refis rose 2%. “Mortgage applications fell last week, driven by a 3 percent decline in purchase applications,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Both conventional and government purchase applications were down, while the average purchase loan increased for the second straight week to $416,200 – the second highest amount ever. The elevated loan size is an indication that activity is more on the higher end of the market. Home-price appreciation growth remains faster than historical averages and inventory, particularly for starter homes, continues to trail strong demand.”



14 Responses

  1. NoVA, remember when you said it wouldn’t make a difference as to who was president when it came to the pandemic?

    It will be interesting to see the reactions when the COVID death count under Biden exceeds that of Trump. I think it’s close now if not already past that marker:


    • It makes a difference because of how the media will treat it. And the fact a Democratic admin can reach out to the news and ask them to stop running death counters on the news cast all the time and they’ll stop, where as a Republican administration cannot do that.

      The media has okayed a huge role in this pandemic, and they are functionally an arm of the DNC, so the party the president is a member of makes a difference.


  2. Next Taibbi pieces are up:

    “The Holy War of Loudoun County, Virginia

    In part three of a series. an opposition galvanized by revelations of bizarre school policies finds itself on an enemies list

    Matt Taibbi

    Dec 22, 2021”

    “Loudoun County Epilogue: A Worsening Culture War, and the False Hope of “Decorum”

    As the wealthiest county in America found out, difficult political problems can’t just be swept under a rug, or into a parking lot

    Matt Taibbi

    Dec 22, 2021″


    • It is amazing how propagandist the mainstream media’s coverage was

      Unfortunately, Taibbi gives them the benefit of the doubt, attributing error to what was nothing more than gaslighting propaganda


      • Yeah, this is bullshit:

        “The Post could be forgiven for not knowing the context of the story, details of which didn’t emerge until later.”

        All they had to do was actually ask the relevant parties.


        • It happened in their backyard. There is no way they didn’t understand exactly what was going on.


        • It was either ignorance or incompetence on the Post’s part

          assuming they only spoke to the “correct” people.
          call a school board official, talk to a parent, don’t talk to anyone else and they have their story.

          it’s shoddy work, but would explain their ignorance.


        • idk. i have to imagine many of them had kids in that district.

          my guess is they fully support everything that was going on.


  3. Good rant:

    “Why the Fuck Do You Trust Harvard?

    college admissions has, does, and will always serve only the institutions and their incredible greed

    Freddie deBoer”


    • Going through the whole college thing right now. financially, it is no fun.


      • Brent:

        Going through the whole college thing right now. financially, it is no fun.

        It sucks. But I made my last payment this month as number three is done and dusted. It is such a relief to be past that.


    • I still find it amazing that college tuition (and textbooks) have appreciated at 3x the rate of inflation since the 90s.

      If oil refiners did this, if automakers did this there would be hell to pay.

      yet crickets.


      • It all depends on what side they are perceived to be on and what segment of the elite they represent. Universities represent the intellectual elite so the tuitions are justified.
        The only problem is that students are supposed to pay rather than taxpayers.


  4. FYI

    “Callin Show Tonight: 5:00 pm EST
    Discussion about “Loudoun County: A Culture War in Four Acts.” Link below

    Matt Taibbi

    As mentioned yesterday, I’m hosting a Callin show tonight about the series, “Loudoun County: A Culture War in Four Acts.” Should be an interesting, and perhaps contentious discussion about a story that reads like a comedy, but was unfortunately quite serious.”


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