Wednesday, June 27, 2012

Pending home sales stronger than expected

Slowly but surely the US housing market is climbing out of that deep hole it was in for some time. Pending home sales came in way above expectations (5.9% MoM vs. 1.5% expected).

US Pending Home Sales Index (SA)

A couple of things worth noting about the pending home sales chart above.
  1. Contrary to popular belief, the housing recession started in 2007, possibly even in 2006, not after the Lehman crash in 08.
  2. The First-Time Homebuyer Credit stimulus program had a tremendous impact on home sales. It tells us that tax incentive programs are quite effective but have a short "half life".
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