SOME GOOD NEWS ON THE HOUSING FRONT, BUT STILL A LONG WAY TO GO
After the disappointing U.S. housing starts data a few days ago, we did see some better numbers out of the existing home sales report, which rose 12.3% MoM in December. This was better than the 4% penciled in by economists, but was partially telegraphed by pending home sales (which tend to lead existing home sales). We wouldn’t classify this as a ‘clean’ number in the sense that there may have been one-off factors boosting the December figure. For one there was an increase in distressed sales (+35%) after a recent moratorium and mortgage rates jumped by 50bps, which may have pushed some buyers off the fence.
Months supply ticked down to 8.1 months from 9.5 ― but by no means is this a balanced market (i.e. it still favours buyers). This may explain why home prices continued to dip (down six months in a row) and negative on a year-over-year basis. [today]