Pending home sales slip for January, as other economic indicators show strength

Source: Calculated Risk

Housing's inflection point--like employment growth--hasn't come. Low transaction rates speak to wide swings of volatility and benchmarks susceptible to lots of noise (i.e. their margin for error). The January Pending Home Sales release from the National Association of Realtors this morning--with a 2.8% decline to 88.9--reflects a market without conviction, and rightly so. Qualifying buyers for FHA and GSE loans is a thrash, and headline risk on house prices keep people waiting, trying to calculate the tipping point on prices and interest rates between falling and rising. Meanwhile, foreclosures (image, courtesy of Collateral Vision's "Picturing Foreclosures" post), continue to make valuation at every level a moving target. Once there's an evenflow on distressed residential real estate deals, and a flow of non-distressed transactions--and who knows when that might be?--the market will find equilibrium. It should be interesting to see what Pending Home Sales do as new home builders' spring selling season progresses and the deals get more enticing by the weekend.

URL to original article: http://www.builderonline.com/builder-pulse/pending-home-sales-slip-for-january--as-other-economic-indicators-show-strength.aspx?cid=NWBD110228002

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