If April showers bring May flowers, what does a winter warming trend bring? Answer: distorted data. And that continues to be the story as existing home sales continue the winning streak of recent housing reports with upside surprises.
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Existing home sales jumped by 5% in December as all four regions saw sales rise. Prices fell by only 2.5% Yr/yr about half the drop of one month ago. It is the highest sales pace for existing home sales since January.
We are cautioning about the housing data because of the unusually warm weather.
Note that the largest gains this month were in the normally cold weather regions of the NE and midwest. In the NE sales rose by 10.7%; in the midwest they rose by 8.3% despite still poor economic conditions. In the south and west sales rose by less than 3% in the month (still a good performance). Winter weather is less of a factor in the south except for wetness while the west is a mixed weather region.
Housing has probably been distorted upward this winter. All the reports have showed strength recently and they are not usually in lock-step.
Now that winter has come, and with a vengeance in some places, we can look for the housing data to beat a retreat. We are not negative on housing, just wary of the degree of ebullience.