Pending Home Sales Crash 7.7%, Biggest Drop In Four Years
While the report doesn’t signal a dramatic collapse in housing, the recovery may have trouble gaining traction. Previously released NAR data showed purchases of previously owned houses rose for a secondstraight month and exceeded forecasts in November.
Finally, not even Larry could spin the report as bullish admitting that the latest government shutdown will harm the housing market. “Unlike past government shutdowns, with this present closure, flood insurance is not available. That means that roughly 40,000 homes per month may go unsold because purchasing a home requires flood insurance in those affected areas,” Yun said. “The longer the shutdown means fewer homes sold and slower economic growth.”
That said, he did leave off on a positive note, with Yun saying he believes that there are good longer-term prospects for home sales. “Home sales in 2018 look to close out the year with 5.3 million home sales, which would be similar to that experienced in the year 2000. But given the 17 million more jobs now compared to the turn of the century, the home sales are clearly underperforming today. That also means there is steady longer-term growth potential.”