MBS Day Ahead: Will Pending Home Sales Data Sing Same Tune as Other Housing Data

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Posted To: MBS Commentary

The National Association of Realtors publishes reports for both Pending and Existing Home Sales. The conventional wisdom is that Pending Sales tend to foreshadow Existing Sales to some extent. Precedent suggests that does indeed tend to happen more than 50% of the time. Case in point, Pending Sales leaped from 106.0 at the end of October to 109.3 at the end of November. Then, true to the conventional wisdom, Existing Sales experienced a similar leap last week, moving up to a whopping 5.81 million (annual pace) from 5.48 million previously. The interesting thing is this: as far as relative ranges are concerned, the Existing Home Sales breakout was much bigger than last month's Pending Homes data suggested. Based on the trendlines I drew in last week's housing newsletter , one might even…(read more)

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