Pending Home Sales Up 44.3%


Put a giant * on March, April, and May’s data, wait until July 15th and then look at housing data.

This was my theme earlier in the year, and it was a heads up for my epic housing crash friends to not commit too much to their housing 2020 collapse thesis.

The July 15th date was used for a specific purpose. Based on my AB economic model, May 18th would be the day that we flattening the curve, and housing should be better 30-60 days out. See what the Housing bears who are mostly an anti-Central bank doomsday cult people never understood are that housing economics is primarily driven by Demographics and Mortgage Rates, two things that they never really talk about.  These two are at the best levels in our country’s history now, and we still today have over 133,000,000 people working. We only need 4,000,000 mortgage buyers each year to keep that existing home sales base intact.

Also, we just came from the weakest housing recovery cycle ever recorded in history. Years 2008-2019 simply didn’t have the demographic profile to have breakaway housing data. Or in my case, these metrics, purchase application data above 300 and 1,500,000 housing starts until the years 2020-2024. We aren’t working from an overheated market running into the best housing demographics patch ever recorded in history with low mortgage rates. This is why for many years, I said Housing is the year 2020-2024 story. Now, this horrific virus will impact that thesis even if we get total sales (New & Existing Homes combined) over 5,400,000 in 2020. However, this obsession with bubble crashes in housing has created a cult group of non-data miners who are simply a one-trick pony.  This week for Housing Wire, I will talk about what needs to happen for the V Shape recovery in Housing to turn into a W in 2020.

The V-shaped recovery continues for housing market

Context is always crucial with housing data, this massive increase in the pending home sales is only due to short term shutdown fear of the virus. We are still negative year over year.

Always be the detective, not the troll. Believe in economic models! 

NAR:The Pending Home Sales Index (PHSI),*, a forward-looking indicator of home sales based on contract signings, rose 44.3% to 99.6 in May, chronicling the highest month-over-month gain in the index since NAR started this series in January 2001. Year-over-year, contract signings fell 5.1%. An index of 100 is equal to the level of contract activity in 2001.

From Doug Short:
July Pending Home Sales

My AB ( America Is Back) economic model took a hit recently with the increase in new cases.

Model updated here:

We still have so much work to do as a country to get into full AB mode. However, for housing, just remember, keep an eye out on purchase application data on a year over year basis only for the rest of the year. These last two 18% and 21% year over year growth trends probably can’t be sustained, but all we need for housing to be ok is flat to positive year over year growth until 2021 as seasonality has kicked in with this data line.

From Calculated Risk:


Stay safe, wash your hands, and wear a mask people, you’re messing up the recovery up.

Logan Mohtashami is a housing data analyst, financial writer, and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami, now retired, was a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data daily on his Facebook page and is a contributor for HousingWire.