Stocks Rise As Housing Market Collapses

It's a good thing stocks are rising, or I would have thought the economy was collapsing!

Richmond Fed Disappoints, New Home Sales Decline

How could new home sales decline in June?

But it looks like stocks may be putting in a bottom!

from Zero Hedge:

Another set of ugly economic data to add to the earlier Case Shiller miss: the Richmond Fed officially contracted despite expectations of a rise from 3 to 5, dropping to -1. This means that the recent rebound from negative to positive and back to negative is indicative there is something far more broken with the economy than just a transitory soft patch. New home sales also deteriorated dropping from 315K to 312K, on expectations of a rebound to 320K. The median sales price was $235,200, and the average $269,000, on 6.3 months of supply. As Joseph Brusuelas of Bloomberg said, "Nothing in data suggests any turnaround." Yet the irony is that the end consumer: the entity that is getting pounded daily by this administration and the oligarchy, just became more confident, with the number beating consensus of 56 and printing at 59.5... on Hopium! Yes, the current conditions declined from 36.6 to 35.7, but at least American have managed to revert to their standard optimistic outlook, and the six month outlook surged from 71.6 to 75.4. Hilarious. Nonetheless unlike before when this goalseeked data point would have been enough to set off a massive buying spree by the HFT algos, today it is insufficient, and following the relentless barrage of bad economic data ES just took out overnight lows.

From Bad to Worse: New Home Sales Collapse in February, Stocks Sink

WASHINGTON (MarketWatch) — Sales of new single-family homes collapsed in February, the Commerce Department reported Wednesday, as a combination of high unemployment, tumbling prices and a glut of cheaper alternatives brought activity to a near-standstill.

New-home sales fell 16.9% to a seasonally adjusted annual rate of 250,000 in February, though January’s figures were revised higher to 301,000 from 284,000. Compared to February 2010, sales collapsed by 28%.
Every region but the West saw record lows, and in the Northeast, sales dropped by 50% compared to year-earlier levels.
Economists polled by MarketWatch had expected a slight rise to a 290,000 rate in February. January’s sales were hurt in part by abnormally bad weather and the expiration of a California tax credit.

The new-home sales release is notoriously volatile, and the margin of error is plus or minus 19.1%. The less-volatile three-month average to February was 295,000, compared to 307,000 in January.
Demand for new homes is weak, constrained by still-high unemployment, a slow-growing economy, but most of all the remnants of the house-price bubble, with many owners unable to move due to being underwater on their mortgage.
Furthermore, it’s now far cheaper to buy an existing home due to the glut of foreclosed properties on the market.
The median price of a new home in February was $202,100, a dive of 13.9%, which is the largest one-month percentage drop on record. Even so, the median existing-home price was $156,100 in February. In Dec. 2007, the first month of the Great Recession, the gap between the price of new and existing homes was far narrower, when a new home fetched $227,700 and a lived-in home cost $207,100.
At the current sales rate, there are supply of 8.9 months, the highest backlog since the 9.1 months in August 2010.

WASHINGTON (TheStreet) -- Sales of newly built homes plunged 16.9% in February to a seasonally adjusted annual rate of 250,000, the Commerce Department said Wednesday, a far bigger jump than expected and the worst rate on record since 1962. 
February's rate of home resales remained 24.8% below the cyclical peak of 6.49 million units in November 2009, which was the initial deadline for the first-time homebuyer tax credit, and 2.8% below the home resale rate in February 2010.

Real Estate Sales Plunge Record Amount!

Housing - A Picture Worth a Thousand Words

from Fox Business:

Pending Home Sales Plunge Most Since April

WASHINGTON (MarketWatch) - A forward-looking gauge of home buying declined sharply in January, dropping to the lowest seasonally adjusted level since last April, an industry trade group reported Thursday. The pending home sales index fell a seasonally adjusted 7.6% in January after a revised 0.8% gain in December. The index remained 8.8% higher than in January 2009. The index tracks sales contracts signed on previously owned homes.

Stocks gave up all gains as a result, are now building a foundation to attempt another rise.

January U.S. New Home Sales Drop to Record Low

But the news is being drowned out by Bernanke's congressional testimony today. He's promising to keep rates artificially low and blow more bubbles. Stocks are nearly 100 points higher.

WASHINGTON (MarketWatch) -- Sales of new U.S. homes plunged 11.2% in January to a seasonally adjusted annual rate of 309,000, the lowest rate on record dating back to 1963, the Commerce Department estimated Wednesday.

The third-straight drop in sales on a month-to-month basis was unexpected. Economists surveyed by MarketWatch forecast sales to rise slightly, to a pace of 355,000, with buyers taking advantage of a new federal tax credit.
"The housing market remains very, very distressed," wrote Dan Greenhaus, chief economist for Miller Tabak & Co.
"There may have been some weather-related issues playing havoc with the sales data but clearly, these results are extremely unnerving," wrote Jennifer Lee, an economist for BMO Capital Markets. "There is nothing positive to glean from this report."
Sales of new homes are down 6.1% compared with January 2009's 329,000 units, which was the previous record low.

Home Buyer Tax Credit Is a Failure

Dec. 16 (Bloomberg) -- President Barack Obama’s extension last month of a tax credit for first-time homebuyers failed to stir optimism among homebuilders or stock investors about the industry’s prospects.
As the CHART OF THE DAY shows, the National Association of Home Builders/Wells Fargo Housing Market Index and a Standard & Poor’s index of homebuilding shares dropped after Obama signed the legislation on Nov. 6. The chart tracks these indicators since 2000.
Homebuyers received another five months, until April 30, to take advantage of the government’s $8,000 credit. They also became eligible for an additional $6,500 credit if they owned their previous residence for at least five years.
“The extension has not materially helped traffic or sales despite the program’s expansion,” Carl Reichardt, a Wells Fargo analyst, wrote yesterday in a report.
The NAHB/Wells Fargo index, an indicator of builders’ confidence, fell to 16 this month from 17 in November. None of the 47 economists in a Bloomberg News survey expected the decline. Readings below 50 show that most participants are pessimistic.

Stocks Surge on Durable Goods, New Home Sales

Stocks surge as waves of U.S. economic data — featuring durable-goods orders shock and new-home-sales pickup — inspire recovery hopes. Durable goods tends to be very erratic, but the number was so good that it can't be ignored. However, many traders are extremely skeptical that they data is accurate. The January figure was revised sharly downward, and others have suggested that the durable goods pick-up may be due to tax refunds being spent.

U.S. sales of newly constructed housing jump nearly 5%, bouncing back from January's record low. New home sales should be good this time of year. Spring is when home sales tend to pick up anyway, but it all may be due to seasonal factors. The government data refers to "seasonal adjustments". To me, that says that the numbers are doctored.