The National Association of Realtors' index of pending home sales unexpectedly jumped a robust 10.4 percent in October, its biggest gain in the index's nine-year history. The index measures existing homes under contract, with the actual sale still a month or more ahead, making it a forward-looking indicator. The stock market cheered the news — but does it show that the housing market is finally past its worst days, or is this uptick just a "blip"? (Watch a Fox Business report about the sales rise)
This is good news: The jump in future home sales "is quite a news maker," says Connie Madon at BloggingStocks. Home sales won't rebound to pre-meltdown numbers right away, but this means that "very slowly, confidence is returning" to the market. And with good reason. With the economy picking up steam, and interest rates so low, consumers see this "as the chance of a lifetime to make a home purchase."
"Good news! Pending home sales jumped a record 10%"
Actually, this increase is meaningless: "Cow patties," says Lee Adler at Business Insider. This upward "blip" is nothing but a "dead cat bounce from an atrocious level in September." Even these "good" pending-sales numbers mark the worst October in 15 years. We won't see any meaningful, sustained recovery until we get rid of the massive oversupply of houses on the market, and we're a long ways from that.
"The reported jump in pending home sales is a joke"
We should still cheer modest sales: October's "huge bump" in pending sales isn't quite big enough, but it also gives us "some reason for optimism," says David Indiviglio at The Atlantic. It means people weren't spooked by the banks' foreclosure mess, as expected. Even if demand isn't "astronomical," this "relatively healthy number of sales may be enough to keep the broader economic recovery moving confidently in the right direction."
"Is the housing market on the verge of a rebound?"
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- How to be the most productive person in your office — and still get home by 5:30 p.m.
- 43 TV shows to watch in 2014
- How liberals are unwittingly paving the way for the legalization of adult incest
- How the Simpsons/Family Guy crossover revealed the worst of both shows
- Watch out, China — America is working on dogfighting drones
- Why you probably don't have Ebola — even if you shook hands with America's 'patient zero'
- 6 things the happiest families all have in common
- Libertarianism's terrible, horrible, no good, very bad idea
- Ted Cruz is the new Sarah Palin
- Why America won't have enough money to battle ISIS
Subscribe to the Week