No, The Plunge In Home Sales Was “Not” Due To Cold Weather

No, The Plunge In Home Sales Was “Not” Due To Cold Weather

This morning’s utter collapse in pending home sales – a 6-sigma miss by ‘economists’ unaware that it was cold in December – has been ushered away on the back of “weather” reasoning. However, a glance at the chart below confirms this is total bullshit. As Goldman Sachs admits “broad-based declines by region suggest that colder-than-average weather was likely not the primary driver.”
 

(h/t @Not_Jim_Cramer )

Via Goldman Sachs,

Pending home sales dropped 8.7% in December (vs. consensus -0.3%), the largest decline since the expiration of the first-time homebuyer tax credit in 2010. Sales declined in the Northeast (-10.3%), West (-9.8%), South (-8.8%), and Midwest (-6.8%).

The broad-based declines by region suggest that colder-than-average weather was likely not the primary driver, given slightly warmer-than-average temperatures on the Pacific coast in December.

Although a noisy series, the December weakness in pending home sales is an unfavorable indicator for near-term existing home sales, and follows disappointing new home sales already released for the month.

So, if it wasn’t the weather… could it be that fast-money has left the bubble and what is left of the real-money mortgage-paying homebuyers are all that remains?

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