Homebuilders Slump as Pending Sales Show Surprise Drop in October (XHB) (HOV) (PHM)
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Although conditions were mixed across the country, pending home sales continued to move lower in October, marking the fifth consecutive monthly decline, according to the National Association of Realtors.
The Pending Home Sales Index slipped 0.6 percent to 102.1 in October from an upwardly revised 102.7 in September, and is 1.6 percent below October 2012 when it was 103.8. The index is at the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings.
The Street was looking for a gain of 1.3 percent.
Modest gains in the Northeast and Midwest were offset by declines in the South and West. Yun notes there was a greater impact in the high-cost region of the West, where tight inventory also is holding back contract offers. He expects generally flat home sales going into 2014, but continued growth in home prices from limited inventory conditions.
Annual existing-home sales should be nearly 10 percent higher this year than in 2012, totaling just above 5.1 million, with a comparable volume expected in 2014. The national median existing-home price for 2013 is projected to be 11 percent above last year, and then cool to a 5.0 to 5.5 percent increase in 2014.
Lower today is SPDR S&P Homebuilders ETF (NYSE: XHB), as well as several hom builders including A.O. Smith (NYSE: AOS), PulteGroup (NYSE: PHM), Taylor Morrison (NYSE: TMHC), Hovnanian Enterprises (NYSE: HOV), Ryland Group (NYSE: RYL), and others.
The Pending Home Sales Index slipped 0.6 percent to 102.1 in October from an upwardly revised 102.7 in September, and is 1.6 percent below October 2012 when it was 103.8. The index is at the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings.
The Street was looking for a gain of 1.3 percent.
Modest gains in the Northeast and Midwest were offset by declines in the South and West. Yun notes there was a greater impact in the high-cost region of the West, where tight inventory also is holding back contract offers. He expects generally flat home sales going into 2014, but continued growth in home prices from limited inventory conditions.
Annual existing-home sales should be nearly 10 percent higher this year than in 2012, totaling just above 5.1 million, with a comparable volume expected in 2014. The national median existing-home price for 2013 is projected to be 11 percent above last year, and then cool to a 5.0 to 5.5 percent increase in 2014.
Lower today is SPDR S&P Homebuilders ETF (NYSE: XHB), as well as several hom builders including A.O. Smith (NYSE: AOS), PulteGroup (NYSE: PHM), Taylor Morrison (NYSE: TMHC), Hovnanian Enterprises (NYSE: HOV), Ryland Group (NYSE: RYL), and others.
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