Pending home sales post increase of 6.3%
I noticed this article in today’s USA Today online edition. Of course it was buried in the bottom of the edition. Why would the media continue to downplay positive signs of potential economic recovery when they can sell more using all the bad news. Hmmm….
The National Association of Realtors said Tuesday its seasonally adjusted index of pending sales for preowned homes for December rose 6.3% to 87.7 from an upwardly revised November reading of 82.5. That’s better than the 82.3 reading economists expected, according to a survey by Thomson Reuters.
The reading also was up 2.1% from December 2007.
“In an otherwise bleak landscape, this represents a ray of hope, as it’s a leading indicator for existing home sales. I’m sure it’s foreclosure-driven, so it could be a hollow number,” said Brian Dolan, chief currency strategist at Forex.com.
Data from the housing market, which is at the center of the worst financial and economic crisis in decades, has sent conflicting signals in recent days.
Last week, the NAR reported an unexpected rise in existing home sales in December, driven mainly by distressed sales, with prices falling from a year earlier by the biggest margin in over 40 years.
The NAR’s housing affordability index jumped 10.9% in December to 158.8, the highest since it began tracking records in 1970. The index rose on falling home prices and low mortgage rates.
But government data Thursday showed sales of new U.S. single-family homes dropped in December by their biggest margin since 1994.
Stability in the housing market is critical to the U.S. economy’s recovery. The economy slipped into recession in December 2007.
The pending sales index tracks signed contracts to purchase existing homes. Typically there is a one- to two-month lag between a contract and a done deal. Home sales that were pending in December are likely to be completed in the coming weeks.
