Dave in Denver writes:
"'If you tell a lie big enough and keep repeating it, people will eventually come to believe it' - Joseph Goebbels, Hitler's Propaganda Minister
"Many of you woke up yesterday to news that existing home sales for October were higher than expected and that the homebuilder sentiment index had reached a 6-yr high. This morning, housing starts were reported and were better than expected, although this reading was achieved by revising last month's data report lower. All three data points are being promoted as evidence that housing was recovering. See the quote above.
"To put a "truth" dent into the existing home sales report, the data as it's being promoted is not supported by fundamental evidence. For instance, with existing home sales, although there was an increase, it would look to be as a result of investment in rental buyers and maybe some speculators. If you review the mortgage purchase application data for September and October, there has been a definitive downtrend. "Organic" buyers who are buying a home to live in as a primary residence - the bread and butter of a healthy housing market - require mortgage financing in order to purchase a home. The data being reported on mortgage purchase applications does not indicate that the existing home sales are being purchased by this type of buyer. ..."