Friday, January 31, 2014

Pending home sales collapse in Dec. 2013, 'surprises' economists, lowest since Oct. 2011, all 4 regions drop, Nov. 2013 revised down

1/30/14, "No, The Plunge In Home Sales Was "Not" Due To Cold Weather," Zero Hedge

"This morning's utter collapse in pending home sales - a 6-sigma miss by 'economists' unaware that it was cold in December - has been ushered away on the back of "weather" reasoning. However, a glance at the chart below confirms this is total bullshit. As Goldman Sachs admits "broad-based declines by region suggest that colder-than-average weather was likely not the primary driver."
Via Goldman Sachs,
Pending home sales dropped 8.7% in December (vs. consensus -0.3%), the largest decline since the expiration of the first-time homebuyer tax credit in 2010. Sales declined in the Northeast (-10.3%), West (-9.8%), South (-8.8%), and Midwest (-6.8%).
The broad-based declines by region suggest that colder-than-average weather was likely not the primary driver, given slightly warmer-than-average temperatures on the Pacific coast in December.
Although a noisy series, the December weakness in pending home sales is an unfavorable indicator for near-term existing home sales, and follows disappointing new home sales already released for the month.
So, if it wasn't the weather... could it be that fast-money has left the bubble and what is left of the real-money mortgage-paying homebuyers are all that remains?" map from NOAA Climate Prediction Center via Not Jim Cramer twitter. (Zero Hedge didn't provide a link for the Goldman Sachs quote and I couldn't find it anywhere myself. Susan)


1/30/14, "Pending homes plunge, surprising economists," CNBC, Katie Little

"Signed contracts to buy existing homes dropped 8.7 percent in December as abnormally cold weather hit much of the U.S., according to a new report from the National Association of Realtors.

The plunge caught economists by surprise. Economists polled by Reuters had forecast pending home sales would tick up 0.3 percent. 
This pending home sales index fell to 92.4 from a downwardly revised 101.2 in November. These signed contracts are an indicator of sales in January and February, and are at the lowest level since October 2011....

All four major regions in the U.S. saw declines.

Of these, the northeast saw the steepest fall while the Midwest's drop was smallest in December from the month before. Still, the NAR forecast that total existing-home sales should be close to 5.1 million this year, about the same as 2013, although inventory is limited in much of the U.S."


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