Contracts for pending sales of previously owned homes rose faster than expected in December after the prior month's sales were revised lower, data from a real estate trade group said on Thursday.
KEY POINTS: * The National Association of Realtors Pending Home Sales Index, based on contracts signed in December, was up 2 percent to 93.7 from a downwardly revised reading of 91.9 in November. * Economists polled by Reuters had expected pending home sales to rise by 1.0 percent. The index has risen in five of the last six months, though it is still 4.2 percent lower than the 97.8 level of a year ago.
JIM O'SULLIVAN, CHIEF ECONOMIST, MF GLOBAL, NEW YORK
This shows housing is moving up from a low level again. Unlike the new homes sales report, the pending home sales index showed a decline in the West. The pickup in new home sales there may have to do with people rushing to take advantage of the tax credit in California before the end of the year.
On balance, it looks like an improving trend. But with the glut in existing homes, housing won't be a significant contributor to GDP this year.
STEVEN WOOD, CHIEF ECONOMIST, INSIGHT ECONOMICS, DANVILLE, CALIFORNIA:
Pending homes sales have been on a rollercoaster ride over the past two years because of the on-again, off-again home buyers' tax credits. After reaching a cyclical nadir in June after the expiration of the last home buyers' tax credit, pending home sales have been recovering but still remain relatively depressed.
To everyone's surprise, the home foreclosure moratorium by several major financial institutions does not appear to have had any effect the data. Home sales are struggling to find their fundamental level, unaffected by government stimulus programs that appear to have shifted the timing of home purchases but do not appear to have noticeably affected the level of home sales.
DAVID SLOAN, ECONOMIST WITH IFR ECONOMICS, A UNIT OF THOMSON REUTERS
The rise is not strong enough to imply December's 12.3 percent surge in existing home sales will be extended in the near term, with a correction lower in that series looking more likely. Pending home sales are designed to lead existing home sales.
RUDY NARVAS, SENIOR ECONOMIST, SOCIETE GENERALE, NEW YORK:
It was better than expected, it looks like most of the strength was in the Midwest and the South, although there was a bit of a pullback in the West. Overall it is a pretty good number despite the fact that the previous month was downwardly revised. Recent housing data has been on the positive side.
MARKET REACTION: STOCKS: U.S. stock indexes were little changed BONDS: U.S. Treasury bond prices FOREX: The dollar barely moved.