Oops! Existing Home Sales Drop – More Bad Economic Reports Today
by Dave Kranzler, Investment Research Dynamics
I’ll have LOT more on the matter of existing home sales sometime in the next 24-36 hours. But suffice to say that the stock market bubble bulls were looking for April existing home sales to come in at an SAAR “seasonally adjusted, annualized rate” of 5.22 million. Not only did it miss that number badly, being reported at 5.04 million, but it was a 3.3% drop from March.
This just in: folks, existing home sales should be rising from March to April, not declining. Especially with the wide proliferation of Government-sponsored 0-3% down payment mortgage financing at near-record low interest rates. AND, that type of financing is now available down to a 580 credit score. A 580 credit score is the equivalent of C-rated junk bond – i.e. about a 40-50% chance of default.
This report is a complete disaster, because it’s a “seasonally adjusted, annualized” rate. The actual number for April was likely shockingly low. I have not had a chance to read the details, but I can guarantee that the National Association of Realtor “wizard,” Larry Yun, will blame the drop on “low inventory.” I don’t know about the rest of the country, but inventory in Denver is starting to pile up like dogs under a cat on a hot tin roof – especially at the $800k and over segment.
I will have more later, including a shocking report about some homebuilder insiders who are dumping their company’s shares at the same rate as they were in 2005. It’s one of the companies I cover in my Homebuilder Research Reports, all of which make some of the best short-sell plays in the market. Any money manager who owns homebuilders and does not consider the information in my reports is violating its fiduciary duty to its investors.
The U.S. Macro index has never dropped this quickly in its history (source: Zerohedge, edits are mine – click to enlarge):