Jan Pending Home Sales, a measure of contract signings of existing homes, fell an unexpected 7.6% m/o/m vs the forecasted gain of 1%. The NAR chief economist blamed the decline on the “abnormally severe and prolonged winter weather, which affected large regions of the US, hampered shopping activity in Feb.” His belief is that we’ll get a rubber band snapback Apr thru June but the spring is always the busiest time of the yr. Bottom line, there is no question that weather impacted activity but the market is also seeing the hangover from the large pickup last summer/fall induced by lower mortgage rates and the home buying tax credit. Spring will see improvement as it always does and also due to the knowledge that the Fed’s purchases of MBS end as does the home buying tax credit, so pent up demand will be there. The real question though is what happens this summer into the fall when the government steroid shots wear off.
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