By Dr Denver H. Bubble
Pending home sales in January 2018 fell by 4.7% versus a 0.5% expected increase in sales. This is the largest decline since May 2010. Like new home sales for January, this was down for the month and missed consensus expectations. Purchases were down 9% in the Northeast, while in our home region it was only down 1.2%. The guru from the NAR, the National Association of Realtors, Lawrence Yun, who wild missed the 2007-2008 housing crash tried to spin this as a nationwide inventory issue.
From the NAR website, Yun said “The economy is in great shape, most local job markets are very strong and incomes are slowly rising, but there’s little doubt last month’s retreat in contract signings occurred because of woefully low supply levels and the sudden increase in mortgage rates. The lower end of the market continues to feel the brunt of these supply and affordability impediments. With the cost of buying a home getting more expensive and not enough inventory, some prospective buyers are either waiting until listings increase come spring or now having to delay their search entirely to save up for a larger down payment.”
Experts and Economists typically conder pending home sales a leading indicator of the housing market because of how they track contract signings. The data is showing that faced with decline inventory, raising rates and home prices multiple factors above the median income, it is clear that the housing bubble we are in is on its last legs.