Pending home sales inch higher in October
* Pending home sales rose 0.6% between September and October, compared to expectations for a decline of 1%. On a year-over-year basis, sales were down 18.4%.
* Sales rose 16% in the Northeast and 8.4% in the West, while they fell 1.4% in the Midwest and 7.8% in the South.
The good news is that pending sales aren't getting any worse. The bad news is they're still at depressed levels. We'll likely see fewer pending contracts actually close, too, given the renewed bout of credit contagion we're dealing with.
So where do we go from here? Well, we have opposing forces at work in housing. The Federal Reserve is lowering interest rates, with another 25 or 50 basis points in cuts coming tomorrow. The federal government is also trying to combat the foreclosure wave with interest rate freezes and looser FHA lending policy.
Unfortunately, private lenders are continuing to tighten their mortgage standards. And we're still dealing with a mountain of excess for-sale inventory. The end result is that the housing market should remain weak, with prices gradually falling and sales remaining lackluster, through late 2008, and possibly into 2009.