The Reported Jump In Pending Home Sales Is A Joke
Lee Adler, The Wall Street Examiner
Dec. 2, 2010
Here’s what Bloomberg had to say about this morning’s reported jump in pending home sales (signed sales agreements).
Pending sales of U.S. existing houses unexpectedly jumped by a record 10 percent in October, indicating the industry at the center of the last recession is stabilizing as the job market improves.
Allow me to phrase this as delicately as I can.
That’s… just… cow patties.
Let’s focus on the actual, not seasonally adjusted number. In my housing updates in the Wall Street Examiner Professional Edition I convert the Realtors’ Pending Home Sales number to an actual number equating the index to the existing home sales number for the month that will be released late in the month. This number rose by 35,500 units or 9.2% m/m. Sounds good, right? Not so much when considering that September’s level of 385,500 is the worst September level in the past 15 years, including being the worst September since the housing collapse began in 2006-07.