Pending home sales for the month of October were nearly flat vs. economists expectations of something much higher.
The Wall Street Journal reports Pending Home Sales Rise 0.2% in October, economists had predicted a 1.5% increase.
The Bloomberg Econoday consensus was for a +1.0% gain.
Sales of existing homes have been soft and are not likely to pick up in the next few months based on October’s pending sales index which is up only 0.2 percent. Year-on-year, the index is up 3.9 percent which matches the rate of gain for final sales during October. Flatness, unfortunately, is the theme.
The Northeast did the best in October, up 4.5 percent for a year-on-year plus 6.8 percent. The West is next with pending sales up 1.7 percent for a year-on-year gain of 10.4 percent. Bringing up the rear are the Midwest, down 1.0 percent on the month for a year-on-year plus 3.3 percent, and the largest region which is the South, down 1.7 percent in October for the only negative year-on-year reading of minus 0.3 percent.
The National Association of Realtors cites low supply of available homes as a negative for sales and warns that prices in some markets are rising too fast, especially for first-time buyers. The association cites strength in the Northeast as an example, a region where price appreciation is lower and supply greater.
The new home market isn’t doing that much better than existing homes, with sales up 4.9 percent year-on-year in the latest available data. Watch for construction spending on tomorrow’s calendar, one aspect of the housing market that has been showing solid strength.
Housing has undeniably cooled and so has retail spending. Manufacturing is in an outright recession. Jobs and autos have been the two main drivers of the economy. Jobs are a hugely lagging indicator.
Mike “Mish” Shedlock