Thursday, 11 October 2007

NAR chuckleheads make it 8 straight

The National Association of Realtors (NAR) made it 8 straight downward revisions to existing home sales yesterday. NAR now see existing home sales in 2007 at 5.78 million units down from last month's estimate of 5.92 million units. That puts them in line with Goldman Sachs recent estimate of 5.77 million units for 2007.

The NAR also lowered it's wildly optimistic forecast for 2008 to 6.13 million down from 6.28 million units last month. Still, that will prove to be too optimistic. The NAR still believes housing prices will rise next year by 1.3% down from last month's estimate of a 2.2% rise.

Chief muppet at the NAR Lawrence Yun lost all credibility a while ago and you can see why when he comes out with stuff like this:

Lawrence Yun, NAR senior economist, notes that widening credit availability will help turn around home sales. “Conforming loans are abundantly available at historically favorable mortgage rates. Pricing has steadily improved on jumbo mortgages since the August credit crunch, and FHA loans are replacing subprime mortgages,” he said.

Firstly conforming mortgages have always been widely available, just not to people who can't afford them, funny that. To say that FHA loans are replacing subprime loans is gross overstatement. Does that mean all those wannable homeowners that could only qualify for subprime can now get FHA loans? Didn't think so. Pricing on Jumbo's has improved slightly but is still a long way above pre-credit crunch levels. Rates below are courtesy of Bloomberg.

Click here to read the entire report, but I warn you, Yun's comments are cringe worthy.