Pending home sales gauge dropped 2.8 percent (forecast was for 0.6 percent advance), the most since May, to a one-year low of 106.4.
Contract signings rose 0.8 percent in December, revised down from a previously reported 1.6 percent gain Index increased 2.7 percent from January 2016 on an unadjusted basis
Pending sales decreased in the Midwest and West
Pending home sales, which reflect contract signings, declined in January as affordability became an issue for potential buyers. A pickup in mortgage rates since the November election, higher home prices and fewer properties to choose from are limiting progress in residential real estate. At the same time, steadily increasing wages and a growing economy remain sources of support.
Here is a chart for Pending Home Sales (MoM) courtesy of Zero Hedge (the battery in my Bloomberg Anywhere card died).
And Pending Home Sales have declined with declining mortgage purchase applications (again, courtesy of Zero Hedge).
According to the National Restaurant Association’s Restaurant Performance Index, same stores sales are about at the same level as just before The Great Recession.
While the CRB foodstuffs spot price index is about where it was just before The Great Recession, foodstuff spot prices have fallen quite a bit since 2011, causing households to choose cooking at home rather than dining out.
Is this a signal of a coming recession? Or that fact that households are trying to eat healthier? I am betting on the former.
Given the problems with traditional anchor chains in malls (like Macy’s, Sears, JC Penney’s, etc.), shopping mall and CMBS investors had better hope that mall restaurant chains don’t show the same pattern of declining same store sales.
According to the National Association of Realtors, total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, expanded 3.3 percent to a seasonally adjusted annual rate of 5.69 million in January from an upwardly revised 5.51 million in December 2016. January’s sales pace is 3.8 percent higher than a year ago (5.48 million) and surpasses November 2016 (5.60 million) as the strongest since February 2007 (5.79 million).
On a more negative note, existing home sales are finally back to 2001 levels near the beginning of the horid housing bubble of the 2000s.
Also back to 2001 levels is median price of exisiting homes sales at 7.1% YoY.
Mortgage purchases applications are only back to 1997 levels.
Let us hope we never repeat the house price and mortgage credit bubble that started in 1995.
That’s the theory underlying a study of hedge fund holdings by Novus Partners Inc., which sought to calculate how easily the market could absorb concerted selling by large money managers. Using an analysis that turns mainly on how much volume is occurring in stocks favored by professional speculators, Novus says liquidity is at an all-time low.