February pending sales drop
* Pendings dropped 1.9% in February, slightly worse than the forecast for a 1% decline. January's reading was revised to +0.3% from no change, however.
* Regionally, pending sales fell in two out of four regions -- the Midwest (-3.7%), the South (-5.5%). Sales rose 3.2% in the Northeast and 2.1% in the West.
* The index level was 84.6 in February, down 21.4% from a year earlier. The February reading is the worst on record, taking out the previous low of 85.8 in August 2007.
February was another poor month for housing, with pending sales down in many parts of the country. We know the reasons why: Lending standards have tightened. Speculative buying has dried up. And the economy is on the verge of recession, if not in one already.
If there is a bright side out there, it's that lower home prices have started to bring out some buyers in some areas. Or stated another way, there appears to be some "bottom fishing" going on now that houses have gotten noticeably cheaper. But we'll have to see if these pending transactions can actually close -- my concern is that stingier lending standards are leading to more deals falling apart.
Indeed, Washington Mutual provided more evidence today that lenders are still in retrenchment mode. The largest S&L in the U.S. said it would slash 3,000 jobs, shut down 186 home lending offices, and completely exit wholesale lending (making loans through mortgage brokers).
UPDATE: The NAR corrected their figures for the West region to +2.1% on the month from -9.8%. This post has been updated as well.