Pending home sales decrease by 2.8% as housing embraces for another year of declines

The housing shows no sign of rebound not matter what you hear in the financial press.  The pending home sales index, which is forward looking, fell 2.8% in Jan to 88.9, indicating a MOM decline in existing home contracts and suggests that Feb and March aren't going to be worth writing home about. Year-on-year, the index is down 1.5%.

This validates our assumption that housing is not anywhere near finished its descent from the stratosphere to affordability.  Contrary to what we hear from Bernanke et al, we also feel that more pain in the housing market, is exactly what we need to fix the economy.  Via NAR:

Pending home sales eased moderately in January for the second straight month, but remain 20.6 percent above the cyclical low last June, according to the National Association of Realtors.

The Pending Home Sales Index,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.

Lawrence Yun, NAR chief economist, points to the broader trend. “The housing market is healing with sales fluctuating at times, depending on the flow of distressed properties coming on the market,” he said.

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