Following last week's explosion higher in new home sales (despite surging record high prices), it is somewhat intriguing that pending home sales would tumble over 4.1% YoY, and drop 1.0% MoM (missing expectations of a 0.5% drop) and the 2nd biggest drop in 2014.
The 'stunning' rationale for this miss, provided by NAR's chief economist, is... "fewer bargain-priced homes' (which is odd given record prices and record surge in new home sales), and a "rising rate environment" (except rates are collapsing), with hope for the future based on the "employment outlook for young adults improving and their incomes rising" (more lies) and a "shift to more traditional first-time buyers who need mortgages" (except mortage apps are at 20-year lows).
Just last week, New home sales rose the most since 1992:
but Pending Home Sales dropped almost the most in 2014...
Do not show NAR Chief Economist Larry Yun this chart...
"Exiting home sales are expected to be stronger in the second half of the year behind improved inventory conditions, continuously low interest rates, and slower price growth"
NAR, Lawrence Yun