WASHINGTON (Reuters) – Contracts to purchase previously owned U.S. homes fell by the most in more than three years in September, a sign that a softer economy and a rise in mortgage rates are hurting the country’s housing market.
The National Association of Realtors said on Monday its Pending Homes Sales Index, based on contracts signed last month, plunged 5.6 percent to 101.6, the fourth monthly fall in a row. Economists polled by Reuters had forecast a slight increase.
Mortgage rates have risen sharply since May on bets that the U.S. Federal Reserve would soon begin winding down a stimulus program, although rates have eased slightly in recent weeks.
This is a direct result of the sophistry of the economic and finance people …. across the world and their failure to recognize reality. One can make the banks solvent by printing money all one wishes. It doesn’t fix the persistent underlying problems.
The fact remains that our home values are over priced. Making money available for loans doesn’t change that. American economic and financial conditions have not improved since the recession. We simply don’t have the wealth to float a false market.
So the large housing outfits buy homes to turn them to a profit. This is easily done because of the Fed printing and the availability of homes and capital. But, the end buyer hasn’t the income to buy the homes at the inflated prices, caused by the influx of cash via the printing.
We’ve doubled down on the stupid. Actually tripled down, and still they insist this will work. Well, not really, they’re now in the stage of starting to realize their folly, but, can’t see a way out. More on that in a minute.