Tag Archives: Pending Home Sales

U.S. Pending Home Sales Surprise, Biggest Annual Gain Since 2015

Despite disappointing slowdowns in sales of new- and existing-homes, pending home sales were expected to show a small positive gain in September but surprised with a 1.5% MoM pop (0.9% exp).

This is the strongest pending home sales index since Dec 2017…

The National Association of Realtors’ Index of pending home sales increased 6.3% in September from a year earlier on an unadjusted basis, the biggest gain since August 2015

“Even though home prices are rising faster than income, national buying power has increased” with lower interest rates, Lawrence Yun, NAR’s chief economist, said in a statement.

“But home prices are rising too fast because of insufficient inventory.”

The monthly gains in contracts were concentrated in the Midwest and South, while the West and Northeast recorded declines.

Source: ZeroHedge

Pending Home Sales Confirm Housing Market Rebound

After new- and existing-home-sales rebounded notably in August, expectations were that pending sales would complete the trifecta and sure enough it did (rising 1.3% MoM, better than the 1.0% expected jump)

Source: Bloomberg

Pending home sales rose 2.48% YoY – the biggest annual jump since April 2016…

Source: Bloomberg

All regions saw an increase in sales in August:

  • Northeast up 1.4%; July fell 1.6%
  • Midwest up 0.6%; July fell 2.4%
  • South up 1.4%; July fell 2.4%
  • West up 3.1%; July fell 3.4%

But we note that The Northeast (-1.1%) and Midwest (-1.6%) both fell year-over-year.

The question is – what happens next? As mortgage rates have rebounded higher and mortgage applications have already tumbled since this sales data…

Source: Bloomberg

Source: ZeroHedge

US Pending Home Sales Fall 9.5% YoY In December To Lowest Level Since 2014 As Fed Unwinds

As The Federal Reserve continues to unwind its balance sheet, pending home sales YoY declined 9.5% YoY, the worst since 2014.\

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Pending home sales got a big boost from The Fed’s third round of asset purchases (QE3), but PHS are feeling the pain of The Fed’s unwind.

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Source: Confounded Interest

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US Pending Home Sales Crash Most In 5 Years

Following Case-Shiller’s report that home price gains are the weakest in four years, Pulte Homes’ CEO admission that 2019 will be a “challenging year,” and existing home sales carnage, Pending Home Sales were expected to very modestly rebound in December.

But they didn’t!

Pending home sales dropped 2.2% MoM (versus a 0.5% expected rise) to the lowest since 2014…

https://www.zerohedge.com/s3/files/inline-images/2019-01-30_7-03-04.jpg?itok=b2uJtbFc

This is the 12th month in a row of annual sales declines… and the biggest annual drop in 5 years…

https://www.zerohedge.com/s3/files/inline-images/2019-01-30_7-02-09.jpg?itok=kLOcP43c

Yet another sign the housing market is struggling amid elevated property prices and borrowing costs – but there’s always hope…

“The stock market correction hurt consumer confidence, record high home prices cut into affordability and mortgage rates were higher in October and November for consumers signing contracts in December,” NAR Chief Economist Lawrence Yun said in a statement.

But with mortgage rates declining recently and the Fed less likely to raise borrowing costs, “the forecast for home transactions has greatly improved.”

Finally,  the Realtors group forecasts a decline in annual home sales to 5.25 million this year from 5.34 million in 2018, which would mark the first back-to-back drops since the last recession.

Source: ZeroHedge

Pending Home Sales Crash 7.7%, Biggest Drop In Four Years

There was some hope for a rebound in US housing indicators, after the recent existing home sales print rebounded, but that was promptly dashed after pending home sales dropped again in November, sliding -0.7% vs the expected 1.0% increase, declining in six of the last eight months, with a cumulative loss since March of -5.9% (-8.9% annualized)…

https://www.zerohedge.com/sites/default/files/inline-images/pending%20home%20sales%20dec%202018.jpg?itok=Wcgsp9YWhttps://confoundedinterestnet.files.wordpress.com/2018/12/phsyoy770.png

…and crashed a whopping 7.7% compared to last year, the biggest annual drop since April 2014.

https://www.zerohedge.com/sites/default/files/inline-images/2018-12-28_7-13-03_0.jpg?itok=DCzMbfsY

This is the worst pending home sales print since June 2014.

https://www.zerohedge.com/sites/default/files/inline-images/pending%20home%20sales%202.jpg?itok=NxyhV0sh

Always eager to put lipstick on a pig, commenting on the collapse NAR chief economist Larry Yun said “the latest decline in contract signings implies more short-term pullback in the housing sector and does not yet capture the impact of recent favorable conditions of mortgage rates.”

Yun added that while pending contracts have reached their lowest mark since 2014, there is no reason to be overly concerned, and he predicts solid growth potential for the long-term.

Not everyone agrees: as Bloomberg notes, the poor results underscore the challenges as elevated prices and higher mortgage rates keep many  Americans on the sidelines of the housing market. Economists consider pending-home sales a leading indicator because they track contract signings; purchases of existing homes are tabulated when deals close, typically a month or two later.

Pending home sales fell in the Midwest and South, which both dropped more than 2 percent from the prior month, while the Northeast and West saw increases. At the same time, all four major regions sustained a drop when compared to one year ago, with the West taking the brunt of the decrease. “The West crawled back lightly, but is still experiencing the biggest annual decline among the regions because of unaffordable conditions,” Yun said.

Yun suggests that affordability challenges in the West are part of the blame for the drop in sales. Home prices in the West region have risen too much, too fast, according to Yun. “Land cost is expensive, and zoning regulations are too stringent. Therefore, local officials should consider ways to boost local supply; if not, they risk seeing population migrating to neighboring states and away from the West Coast.”

While the report doesn’t signal a dramatic collapse in housing, the recovery may have trouble gaining traction. Previously released NAR data showed purchases of previously owned houses rose for a secondstraight month and exceeded forecasts in November.

Finally, not even Larry could spin the report as bullish admitting that the latest government shutdown will harm the housing market. “Unlike past government shutdowns, with this present closure, flood insurance is not available. That means that roughly 40,000 homes per month may go unsold because purchasing a home requires flood insurance in those affected areas,” Yun said. “The longer the shutdown means fewer homes sold and slower economic growth.”

That said, he did leave off on a positive note, with Yun saying he believes that there are good longer-term prospects for home sales. “Home sales in 2018 look to close out the year with 5.3 million home sales, which would be similar to that experienced in the year 2000. But given the 17 million more jobs now compared to the turn of the century, the home sales are clearly under performing today. That also means there is steady longer-term growth potential.”

Source: ZeroHedge

 

Pending Home Sales Plunge In August, Led By Collapse In The West

Pending home sales plunged in August, dropping 1.8% MoM (almost four times worse than expected) to its lowest since Oct 2014 (and fell 2.5% YoY) – the fourth month of annual declines in a row…

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As Bloomberg notes, the decline, which was broad-based across all four regions, shows that higher mortgage rates, rising prices and a shortage of affordable homes continue to squeeze buyers. Existing-home sales in August matched the lowest in more than two years, while revisions to new-home sales showed a slower market than thought, according to previously released figures.

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NAR continues to blame low inventory and affordability

“Pending home sales continued a slow drip downward,” Lawrence Yun, NAR’s chief economist, said in a statement.

“The greatest decline occurred in the West region where prices have shot up significantly, which clearly indicates that affordability is hindering buyers and those affordability issues come from lack of inventory, particularly in moderate price points.”

On a non-seasonally adjusted basis, sales In The West collapse 9.9% YoY…

https://www.zerohedge.com/sites/default/files/inline-images/2018-09-27_7-09-09.jpg?itok=numhxeTt

As a reminder, economists consider pending-home sales a leading indicator because they track contract signings; purchases of existing homes are tabulated when a deal closes, typically a month or two later.

Source: ZeroHedge

Pending Home Sales Decline For 4th Straight Month, Weather Blamed

Pending Home Sales rose just 0.4% MoM (missing expectations of 0.7% MoM) and saw prior months revised notably lower (Feb down from +3.1% to +2.8%).

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Weather remains the ‘go to’ blame factor from realtors as the regional differences suggest…

  • Northeast fell 5.6%; Feb. rose 10.3%
  • Midwest up 2.4%; Feb. rose 0.7%
  • South up 2.5%; Feb. rose 2.9%
  • West fell 1.1%; Feb. fell 0.7%

Unadjusted pending home sales dropped 4.4% YoY (the 4th straight month of declines – the longest streak since 2014)…

https://www.zerohedge.com/sites/default/files/inline-images/2018-04-30_7-12-14.jpg?itok=wm1BUV5v

“Healthy economic conditions are creating considerable demand for purchasing a home, but not all buyers are able to sign contracts because of the lack of choices in inventory,” Lawrence Yun, NAR’s chief economist, said in a statement.

“Prospective buyers are increasingly having difficulty finding an affordable home to buy.”

“It is an absolute necessity for there to be a large increase in new and existing homes available for sale in coming months to moderate home price growth,” he said.

“Otherwise, sales will remain stuck in this holding pattern and a growing share of would-be buyers — especially first-time buyers — will be left on the sidelines.”

Purchases dropped 5.6 percent in the Northeast, reflecting multiple winter storms…

“As anticipated, the multiple winter storms and unseasonably cold weather contributed to the decrease in contract signings in the Northeast.”

As a reminder, economists consider pending sales a leading indicator because they track contract signings.

Source: ZeroHedge

Pending Home Sales Plunge In September To Lowest Since Jan 2015

Following September’s modest bounce in exisitng home sales, and explosion in new home sales (biggest jump in 25 years), today’s pending home sales was a huge disappointment, blowing the bounce back narrative.

Pending Home Sales tumbled 5.4% YoY…

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To its lowest since Jan 2015…

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Take your pick – is the housing ‘recovery’ good, bad, or ugly…

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Source: ZeroHedge