pending home sales: Mortgage Purchase Applications Rise 3.9% The Past Week - 08/20/09 12:49 AM
According to the MBA, after five consecutive weeks in which the mortgage purchase application index remained below 270, signaling weak demand for real estate, the index rose 3.9% this past week to 277.7.
The 30-year fixed rate mortgage fell from 5.38% to 5.15% for the week ending August 14th.
Mortgage purchase applications are an indicator of future demand for real estate.  Typically a potential buyer will apply for a mortgage, write a contract that goes "pending", and then eventually close on the property for a "sale". 
The reason why demand is a critical component of a housing recovery is because the number … (3 comments)

pending home sales: Pending Home Sales vs. Existing Home Sales - 08/12/09 01:33 AM
With all of the talk about the recent strength in pending home sales over the past couple of months, there continues to be a headwind-effect between pending contracts and actual existing sales that are reported by the NAR. 
The relationship between the two indicators has revealed that pending home sales appear to be taking a longer time to close, more like 60 days rather than 30 days, and a smaller percentage of the total pending contracts are actually making it to a successful close.
This attrition rate could be attributed to a couple of influences including the new appraisal HVCC guidelines, the complexities of short sales or … (2 comments)

pending home sales: Mortgage Purchase Applications Struggle To Gain Ground - 08/06/09 01:49 AM
The Mortgage Bankers Association announced on Wednesday that the mortgage purchase application index rose just 0.9% from the previous week to 264.4.
This is the fourth consecutive week in which the index has remained below 265, a signal that demand for real estate continues to face a headwind.
The broader measure for the purchase index, the 4-week moving average, is down -2%.
The 30-year fixed rate mortgage fell from 5.36% to 5.17%.
While the NAR's pending home sales index continues to show strength, the MBA's purchase application index is telling a different story.
The reason this index is relevant is because it … (4 comments)

pending home sales: NAR: Pending Home Sales Up 6.7% Year Over Year - 08/05/09 01:30 AM
The NAR announced on Tuesday that pending home sales rose for the fifth consecutive month to a reading of 94.6, this represents a 6.7% year over year increase and a 3.6% month over month increase, all good things.
What remains to be seen is just how many of these pending contracts will actually translate into closed sales.  Over the past several months the relationship between pending home sales and existing home sales has remained strained due to appraisal and underwriting constraints.
The other material fact that needs to be considered when talking about pending home sales and demand is how those … (4 comments)

pending home sales: NAR: Pending Home Sales Hold Steady - 07/02/09 07:41 AM
The NAR announced yesterday that their pending home sales index held steady in May rising 0.1% to 90.7.  It is the highest reading since September of 2008 when the index hit 90.9.  That's the good news.
The bad news is that while there is the possibility that home sales have bottomed, at least for the time being, the current rate of demand is insufficient in absorbing the excess supply of homes.  Until the excess supply of homes is absorbed, home values will erode.  Currently there is a 9.6 month supply of housing, this is well above a balanced market.
When you consider … (5 comments)

pending home sales: Pending Home Sales Are Up, But Does It Matter? - 06/03/09 01:39 AM
In light of Wall St.'s sucker rally last month in response to NAR's wildly inaccurate pending home sales index results, I wrote a post detailing just how irrelevant this data was becoming.
Here is what I have found in terms of the relationship between the pending home sales index and the following month's existing home sales.
October 2008 Pending Index -0.7% / November 2008 Existing Home Sales -8.6%
November 2008 Pending Index -4.0% / December 2008 Existing Home Sales +6.5%
December 2008 Pending Index +6.3% / Janaury 2009 Existing Home Sales -5.3%
January 2009 Pending Index -7.7% / February 2009 Existing Home Sales +5.1%
February 2009 Pending Index +2.1% / March 2009 … (5 comments)

pending home sales: Pending Home Sales Inch Up 3.2% - 05/04/09 03:15 AM
According to the National Association of REALTORS, the pending home sales index inched up 3.2% from last month and 1.1% from last year to 84.6.
The index is an indication of the number of properties that are currently under contract and are expected to close within 30-60 days.
As I have written about several times before, "context" is what is needed in order to put this data into perspective.  Because as we are seeing, Wall St. along with CNBC and other media outlets are thirsty to make a positive story out of fairly irrelevant data.
So here is some context for you … (6 comments)

 
Mark MacKenzie

Mark MacKenzie

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