Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Pending Home Sales Index Dives to 0.1%: What's Coming Up?

By

PrintPRINT

This article is published in collaboration with Scutify, where you can find real-time markets and stock commentary from Robert Marcin, Cody Willard and others. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

The reset of the year for housing looks suspect at best. The pending home sales index is a barely positive 0.1 percent.

Bloomberg Econoday sees things this way.

Highlights

Pending sales of existing homes rose only 0.1 percent in October, pointing to flat results for the rest of the year in final sales. Pending sales in October were held down by weakness in the South that offset gains elsewhere. The resale market has been soft in contrast to new homes which are having a good year.

Recent History

Resales had been flat this year but rose sharply in September as indicated in advance by the pending home sales index which tracks contract signings. Forecasters see this index rising 0.8 percent in October.

Definition

The National Association of Realtors developed the pending home sales index as a leading indicator of housing activity. Specifically, it is a leading indicator of existing home sales, not new home sales. A pending sale is one in which a contract was signed, but not yet closed. It usually takes four to six weeks to close a contracted sale.

Pending Home Sales

pending-home-sales-2016-11

Was the pending homes sales slowdown in 2013 related to the taper tantrum and rising interest rates?

If so, there's a steep decline in store.

Mortgage Tantrum

tantrum-ii

Chart courtesy of Mortgage News Daily, anecdotes mine.

Despite treasury rates being substantially lower than the peak in 2013, mortgage rates are well into tantrum territory.

For more details of the Taper Tantrum, please see Bond Tantrum II: Mortgage Rates Up 80 Basis Points Since July.

Mike "Mish" Shedlock


This article was written by Mike Shedlock for MishTalk on Nov 30, 2016.

This article published in collaboration with Scutify, the best app for traders and investors. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

< Previous
  • 1
Next >
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE