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May Pending Home Sales:+5.9% to 101 vs. +1.2% expected; -5.5% prior.

May Pending Home Sales:+5.9% to 101 vs. +1.2% expected; -5.5% prior.
Comments (8)
  • Tack
    , contributor
    Comments (14395) | Send Message
     
    No comments? Where's the gloom-and-doom crowd?
    27 Jun 2012, 10:13 AM Reply Like
  • GaltMachine
    , contributor
    Comments (1455) | Send Message
     
    *The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing."

     

    Measures intention not completion which given the high cancellation rate for mortgage underwriting explains why the follow through to actual sales has been tepid.

     

    Basically flat with March's reading.

     

    Truthfully although this is important, new home sales are where the economic activity is most important as you undoubtedly know.

     

    This is not unimportant but the regional FED reports are more meaningful - Chicago FED was negative this morning continuing a string of disappointing reports so there's some doom and gloom for you.
    27 Jun 2012, 10:36 AM Reply Like
  • Tack
    , contributor
    Comments (14395) | Send Message
     
    Galt:

     

    On the contrary, I find the extreme volatility in the regional reports as evidence that their methodologies introduce large inaccuracies. If one reviews the monthly histories of these reports, it's simply impossible that the various economies grow and retract in any manner suggested by those reports. They may have some validity averaged over longer periods, but as far as month to month, I consider them near useless.

     

    It's far better to reply on corporate and industry data to aascertain where things are headed. As far as housing goes, it's been apparent for some time now that activity, and now pricing, is in an uptrend. One can ignore it at their peril.

     

    As regards, new-home activity, it all follows in tandem. People who invest in home-related issues, especially the still-despised home builders, are going to do quite well, I suspect.
    27 Jun 2012, 10:50 AM Reply Like
  • GaltMachine
    , contributor
    Comments (1455) | Send Message
     
    Tack,

     

    "It's far better to reply on corporate and industry data to aascertain where things are headed."

     

    Trust the NAR over the regional FED reports?

     

    December 2011:
    "Sales of existing homes since 2007 were 14% lower than previously reported, the National Association of Realtors said Wednesday.
    The downward revision offered statistical evidence that the U.S. housing slump that followed the collapse of the subprime mortgage market was even more severe than previously thought.
    According to the NAR, in 2010 there were 4,190,000 existing-home sales, down 14.6% from the earlier reported 4,908,000 figure. For the four-year period from 2007 to 2010, sales and inventory were revised downward by 14.3%."

     

    Read more: http://fxn.ws/MU1k0T

     

    FED reports have a very high correlation to payrolls.
    27 Jun 2012, 11:41 AM Reply Like
  • Tack
    , contributor
    Comments (14395) | Send Message
     
    Galt:

     

    I know the NAR is always bashed, but generally I have found relying on corporate and industry data in most sectors to be a better indicator of how things are really going than widely variable regional reports, which clearly harbor their own sizable error. When some regional Fed report suggests that business expanded or contracted 8-10% in a month, then reversed a month later, one can safely assume that there's some kind of error in methodology.

     

    Those fed reports cannot track payrolls on a monthly basis because of the volatility I mentioned. Looking at trends averaged over time may remove some of the volatility error.

     

    For sources other than NAR, see the reports from builders themselves, e.g., LEN today.

     

    Things are getting more positive in the housing arena. But, if one believes it's either false or subject to immediate reversal, then one needn't take any long positions. That's what makes America great.
    27 Jun 2012, 12:05 PM Reply Like
  • torahislife
    , contributor
    Comments (400) | Send Message
     
    With BLS U6 unemployment rate at 18% (includes those dropped off UI claims) , a workforce facing global economic downturn, and the average US citizen losing 48% net wealth in 4 years, and HUGE backlog of forclosures about to hit this sick market...

     

    We'll need several months reversal before this stat is worth paying attention to
    27 Jun 2012, 10:52 AM Reply Like
  • Tack
    , contributor
    Comments (14395) | Send Message
     
    tora:

     

    You may keep quoting those stats, but one can see from the trends in sales and prices that the market is getting healthier, not weaker. Banks are not going to flood the market with foreclosures because it's in their interest to manage the process, just as water is released from excess supply behind dams gradually, not in a torrent that washes away everything downstream. Also, the house-to-rental comparison data now support home purchases, again.

     

    Ironically, what would give housing a real shot in the arm would be for interest rates to reverse and begin to trend upwards. This would bring many more prospective buyers out of the woodwork to lock in rates.

     

    Lastly, housing construction actually does boost the economy because it generates lots of jobs in a wide array of allied industries.

     

    Many people seem to think that because there was past excess that healthy growth can never again occur and won't. They're simply wrong and will miss the inexpensive entry points in this sector.
    27 Jun 2012, 11:15 AM Reply Like
  • nightfly
    , contributor
    Comments (1017) | Send Message
     
    It's spring guys, there's always some bump up now...

     

    Less bad doesn't mean things are great.

     

    In areas where the bubble was less severe, things have probably stabilized for now - as long as there are jobs.

     

    In other areas (the coasts), foreign money is helping stabilize the market, but will continue to face pressure for the foreseeable future.
    27 Jun 2012, 12:29 PM Reply Like
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