According to CNBC, Pending Home Sales Fell Fell More Than Expected In January:
Contracts for pending sales of previously owned U.S. homes fell faster than expected in January to the slowest pace in three months, data from a real estate trade group showed on Monday.
The National Association of Realtors [NAR] Pending Home Sales Index, based on contracts signed in January, declined 2.8 percent to 88.9 from a downwardly revised index of 91.5 in December. That is the second straight monthly decline and the slowest pace since October.
Economists polled by Reuters ahead of the report were expecting pending home sales to decline by 2.2 percent.
Declines in the winter aren’t a huge surprise, so it was disappointing the article did not include the year-over-year data. Fortunately, the NAR’s original report did: [Although I can’t help but get the feeling that they did so reluctantly.]
The Pending Home Sales Index,* a forward-looking indicator, declined 2.8 percent to 88.9 based on contracts signed in January from a downwardly revised 91.5 in December. The index is 1.5 percent below the 90.3 level in January 2010 when a tax credit stimulus was in place. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.
I always love it when economists grasp for some oddball measure to try and show things are better. Yun went for “month-over-seven-month”:
Pending home sales eased moderately in January for the second straight month, but remain 20.6 percent above the cyclical low last June.
My reply to this? Big deal. Even economists shouldn’t be surprised when sales during the busy season well exceed those of the slow season.
Since pendings are a measure of future activity, we have to believe that this is one of the first indicators we are seeing that sales are going to be lousy this spring, which is the peak selling season for housing. We can always count on Lawrence Yun [Or “Sunny Yunny” as L likes to call him.] the chief economist for the NAR, to put a positive spin on things though:
The housing market is healing with sales fluctuating at times, depending on the flow of distressed properties coming on the market.
Ah well, some “fluctuations” last longer than others, and this one could take awhile.