CNBC’s Diana Olick on Pending Home Sales
Here’s the briefing on the National Association of Realtors data on pending home sales from CNBC’s Diana Olick.
Then, there’s what to make of the data. Calculated Risk always helps with the so-what perspective.
This suggests a further decline in existing home sales for the March report (January was the most recent report). Note: there still might be a slight increase in existing home sales in February based on the December Pending Home Sales report.
Note: Existing home sales are reported at the close of escrow, pending home sales are reported when contracts are signed. The Pending Home Sales index leads existing home sales by about 45 days, so the January report suggests existing home sales will decrease from February to March.Finally, ignore the “affordability index”. That really just tells us that interest rates are low – something we already know.
Still, “something we already know” may be overly dismissive.
What we’ll begin to see is a relationship between revert-to-mean home pricing and the psychological conviction among home buyers that they won’t lose money by buying. That’s the inflection point where private sector bid and ask behavior will trump government policy.
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