Oct Pending Home Sales were much better than expected, rising 10.4% m/o/m vs the estimated drop of 1%. The gain was led by the Midwest where contract signings rose by 27.3%. They were up 19.6% in the Northeast and 7.1% in the South while the West was down just .4%. This # is certainly a positive and the gain occurred just as the foreclosure moratorium’s spread starting in late Sept thus creating the upside surprise to estimates. Helping may have been the avg 30 yr mortgage rate being just 4.29% in Oct vs 4.66% as of last night so we’ll see in the months forward what impact that will have. Also of great importance is whether these contract signings turn into closings as the NAR said on Nov 23rd that in addition to the foreclosure moratoriums, closings are being impacted by “very tight credit” making it tough “for some creditworthy borrowers to qualify for a mortgage,” and appraisals that are below the sale priced agreed upon.
