Instant View: Pending home sales unexpectedly rise

NEW YORK (Reuters) – Pending sales of previously owned U.S. homes unexpectedly rose in February, a trade group said on Monday, pointing to a modest pick-up in home sales.

KEY POINTS:

* The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in February, increased 2.1 percent to 90.8. * Economists had expected the index, which leads existing home sales by a month or two, to fall 1.0 percent after a previously reported 2.8 percent decline.

COMMENTS:

MICHAEL SHELDON, CHIEF MARKET STRATEGIST, RDM FINANCIAL, WESTPORT, CONNECTICUT:

“Pending home sales data was somewhat better than expected. There’s a fairly tight correlation between pending home sales and existing home sale, with pending home sales leading existing home sales by approximately two months. Therefore, the fact that pending home sales rose bodes well for existing home sales in the months ahead. Overall, the data continues to indicate it’s probably going to be a while before the housing market gets back on its feet.”

STEVE GOLDMAN, MARKET STRATEGIST, WEEDEN & CO. BASED IN GREENWICH, CONNECTICUT:

“Overall I don’t think there is much expectation in the housing market helping the economy. It still seems to be in the doldrums and this one ray of sunshine’s probably not going to change overall sentiment.”

IAN LYNGEN, GOVERNMENT BOND STRATEGIST, CRT CAPITAL GROUP, STAMFORD, CONNECTICUT:

“Overall, a bit of a bounce but the housing market remains under significant pressure and it’s difficult to be too optimistic in the wake of this modest increase.

“The Treasury market continues to trade weaker — holding on to the overnight downtrade ahead of this morning’s Fed buyback and this afternoon’s two-year auction.

SEAN INCREMONA, ECONOMIST, 4CAST LTD, NEW YORK:

“It was stronger than expected after two declines. It breaks that losing streak. It is still at weak levels, the year on year rate still ugly, but it does suggest that January may have had some impact from that harsh weather and that the housing market is still in a slow-going recovery.”

DAVID SLOAN, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS:

“February pending home sales surprised to the upside with a 2.1 percent increase, not particularly impressive as this fails to reverse even January’s unrevised 2.8 percent decline, a fall that followed a 3.8 percent December drop. However this release does suggest March home sales should see some recovery from very weak, and probably weather-depressed February levels. Survey evidence from the NAHB and MBA is also suggesting slightly less weak March data, though evidence of a significant housing market recovery remains lacking.”

MARKET REACTION: STOCKS: U.S. stocks hold steady at slightly higher levels. BONDS: U.S. bond prices hold steady at lower levels. FOREX: The dollar hits day’s low versus the euro.

Instant View: Pending home sales unexpectedly rise