- Prior was +8.1%
- Index 83.2 vs 82.5 prior
The market is crowded with US housing bears but the data hasn't cooperated and the jump in sales in January when rates dipped argues that there's a groundswell of buyers on the sidelines. The bigger riddle though, is why inventories remain so low. I believe it's because people who own homes that have 30-year fixed mortgages would rather rent them out then sell then, even if they move. The sub-3% 30-year fixed rates of the pandemic were a generation opportunity to lock in costs and that period will pay homeowners a dividend for decades to come.
The pending home sales report is released by the National Association of Realtors, a trade group. It captures the number of residential property transactions that have been contractually agreed upon but not yet closed. It's a reliable predictor of future home sales, typically within a 1-2 month time frame and captures sales of single-family homes, condos, and co-ops. In contract, the existing home sales report captures sales that have already closed. The report is seasonally adjusted to account for fluctuations in home-buying activity throughout the year and is benchmarked to a reference value of 100, which corresponds to the average level of contract activity in 2001.
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