Existing home sales plunged, new home sales surged… so today’s pending home sales print will be the decider over what level of bloodbathery is really occurring in the US housing market. After a surprise jump in December (after 6 straight declining months), analysts expected a modest 1.0% MoM jump in pending home sales in January but were blown away by an 8.1% MoM explosion in sales (though Dec was revised down from +2.5% to +1.1%)….
“Home sales activity looks to be bottoming out in the first quarter of this year, before incremental improvements will occur,” Lawrence Yun, NAR’s chief economist, said in a statement.
That is the biggest MoM jump since June 2020, pushing the index to its highest since August 2022…
“Buyers responded to better affordability from falling mortgage rates in December and January,” said NAR Chief Economist Lawrence Yun.
Sorry Larry… that’s history!
This surge in pending sales is unlikely to continue since mortgage rates have surged since the period these sales were ‘pending’ for.
We also note that while housing futures have surged in recent months, the last week or two have seen them stagnate as mortgage rates soared…
Signings rose in all four regions in the month, led by a more than 10% gain in the West.
“An extra bump occurred in the West region because of lower home prices, while gains in the South were due to stronger job growth in that region,” Yun said.
Even with the surge at the start of the year, contract signings were still down 22.4% from January 2022 on an unadjusted basis.