We just got pending home sales figures from the National Association of Realtors. Here’s what they looked like:
* Pending home sales surged 6.1% in September. That was much better than the unchanged reading that economists were expecting. It’s also the eighth consecutive monthly rise.
* On a year-over-year basis, the pending sales index jumped 21.1% to 110.1 from 90.9. That’s the highest index value since December 2006.
* Regionally, pendings were relatively strong. They rose 4.9% in the South, 8.1% in the Midwest, and 10.2% in the West. Sales dropped 2% in the Northeast.
The existing home market continues to heat up, fueled by cheaper house prices and the first-time buyer tax credit. Pending sales have climbed for eight straight months, and contract signings haven’t been running this hot in almost three years.
Clearly, buyers were eager to get business done before the credit’s November expiration. So I wouldn’t be surprised to see some giveback in pending sales over the next month or two. But with Congress set to extend the credit through mid-2010 … and expand it to a broader pool of potential buyers … the market should remain fairly well-supported. In other words, the “three steps forward, two steps back” recovery in housing remains on track.
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I wonder how many of the homes being bought will end up to be foreclosures? The good jobs that can support homeownership just don’t exist. If the NAR numbers are right, and I have my doubts, a lot of these first timers rushing out to buy homes probably can’t afford them. We will see how this plays out. Also, the expanded tax credit applies to existing homeowners who have owned their homes five out of the past eight years in addition to first timers. I don’t see how that is going to stimulate sales. Like cash for clunkers, this isn’t real and won’t be sustainable.
Fanny, Freddy & FHA are leading the pack.
What happens if (when) WDC runs out of our money, or the check-kiting scheme blows up?
Banks are still sitting on shadow inventory, there are still upwards of 18 million homes sitting empty and we speak of “strong” recovery.
Playing with reality is buying us some time to prepare for the next “unexpected” blow up. Use it wisely or ignore the signs.
Find the information and analysis very informative and to the point!
Mike I always find your comments sound and informative but what I don’t understand is who is supporting the $US in spite of all the negative data ? As I see things, as a 78yr old observer of world finances, the $US is useless, valueless and is being sustained with lies and subtefuge. Can you explain this conundrum ?
regards, George
Mike, what are your views of home/condo rental property investments at this time?
I look forward to your comments. Thank you.