Great Real Estate Market Information Below:
Pending Home Sales
Apr 26, 2012 | 10:43 AM EDT
The reading was better than expected.
March pending home sales were better than expected, rising by 4.1% as compared to a 0.4% increase in February and vs. expectations of a 1% bump.
The year-over-year change was up 10.8% (compared to a small base a year ago).
This is the highest reading in two years, and pending home sales typically foreshadow existing-home sales by several months.
A durable multiyear recovery in residential real estate markets is central to my thesis of a self-sustaining U.S. economy and why I am short bonds. (Please return to yesterday’s opening missive and check out the exhibits from my Northwestern University lecture for supporting material.)
The observations I have recently made and the national data on housing are confirmation of an industry upturn, which is supported by record housing affordability, a compelling home ownership vs. rent equation, the beginning stage of clearing shadow inventory, underproduction of new homes since 2008, pent-up demand as demographic/household formation trends continue, an improvement in the jobs market, improving confidence indicators and a slow easing up in mortgage lending.
The U.S. home market is splintered and bifurcated, which represents to this observer that a recovery in home prices is imminent.
The importance of the housing industry cannot be overstated. Consumer confidence and spending has been held hostage, to some degree, by a sharp drop in home prices, which is now coming to an end.