Bloomberg has latest story about US Pending Home Sales: U.S. Pending Home Sales Probably Fell in March for Second Month
Fewer Americans probably signed contracts to buy previously owned homes in March for the second consecutive month as falling prices and tougher loan rules discouraged buyers, economists said before a report today.
The index of pending home resales fell 1 percent after a 1.9 percent drop in February, according to the median forecast in a Bloomberg News survey of 30 economists.
The glut of unsold properties is driving down home values, while rising defaults on subprime mortgages have prompted lenders to restrict access to credit, representing more hurdles for buyers. The slump in residential real estate may persist for much of the year, hurting economic growth.
Recent reports indicate the worst housing slump in a quarter century is far from abating. Purchases of new homes plunged in March to the lowest level in almost 17 years, while the median price fell the most in almost four decades, according to the Commerce Department.
Sales of previously owned homes fell in March for the seventh time in eight months, according to the Realtors’ group.
The pending resales index is considered a leading indicator because it tracks contract signings. The existing-home sales report reflects closings, which typically occur a month or two later.
Home values fell 7.7 percent in the first quarter to the lowest level in almost three years, according to Zillow.com, an online real estate data provider. Zillow also estimates that almost 52 percent of owners who bought homes in 2006 now owe more on their property than it is worth.
Access to credit is also shrinking. The share of banks making it tougher for companies and consumers to borrow approached a record in the past three months, according to the Federal Reserve’s quarterly survey of senior loan officers issued this week.
The fallout from the housing downturn is spreading. The world’s biggest banks and securities firms cut a combined 65,000 jobs in the past 10 months as mortgage losses and writedowns for financial institutions reached $319 billion, according to Bloomberg calculations.
I believe we are still not out of the woods. The current rise in the stock market seems like a short term uptrend in the bear market. Such violent rallies are very common in the bear market. These are opportunities to lighten up on long positions and slow start entrying short positions.