Pending Home Sales collapsed 8.7% month-over-month - the worst since May 2010 - missing by the most in over 3 years. This is a 6.1% drop YoY. Sellside consensus (-0.3%) was unaware of the horrible weather in December until 13 minutes ago. Of course, analysts could never have guessed that weather could have an impact (and ths reduce their expectations) but NAR's Larry Yun notes "unusually disruptive weather" prevented buyers from looking. However, he goes on to add that "Home prices rising faster than income is also giving pause to some potential buyers." This unusually honest line from the realtor mouthpiece is notable.
Oops...
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But blaming this "miss" on weather means that analyst forecasting this number have no idea.
Isn't it odd that everyone blames the weather, but apparently when they were forecasting consensus they DIDN'T KNOW what the weather would be? (while it had already been!!)
Joe Lavorgna forecast +0.5% was not the worst but a 7-sigma miss of consensus is extreme!!!
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Larry Yun explains what they missed
Lawrence Yun , NAR chief economist, said several factors are working against buyers. “Unusually disruptive weather across large stretches of the country in December forced people indoors and prevented some buyers from looking at homes or making offers,” he said. “Home prices rising faster than income is also giving pause to some potential buyers, while at the same time a lack of inventory means insufficient choice. Although it could take several months for us to get a clearer read on market momentum, job growth and pent-up demand are positive factors.”