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Saturday, December 3, 2022
HomeNewsEconomyWall Street Sluggish On Weak Housing Market Data

Wall Street Sluggish On Weak Housing Market Data

On Wall Street, U.S. equity markets fell flat after the release of weak housing market data, which came in significantly weaker than economists’ forecast.

Contracts to buy previously owned U.S. homes have fallen for 5 straight month now, continuing in October, hitting a new 10-month low and adding to fears the housing market cannot sustain itself with the Federal Reserve’s bond-buying program.

The National Association of Realtors reported on Monday its Pending Home Sales Index, which is based on contracts signed last month, fell 0.6 percent to 102.1 in October, the lowest level since last December.

Contracts were 1.6 percent below last October’s levels.

Economists polled by Reuters had expected signed contracts, which become sales after a month or two, to rise by 1.3 percent.

The National Association of Realtors, a known liberal-leaning group who banks on risky FHA loans, just as they had down with Fannie and Freddie before the financial crisis, claimed the 16-day partial shutdown of the federal government last month had pushed aside some potential buyers.

“In a survey, 17 percent of realtors reported delays in October, mostly from waiting for IRS income verification for mortgage approval,” said NAR chief economist Lawrence Yun in a statement.

The report was the latest indication of a moderation in the housing market recovery. A report from the Realtors group last week showed home resales also fell in October.

Sales have been hammered by a rise in mortgage rates, which saw a small spike on rumors  the Fed would taper back the bond-buying program, know as quantitative easing. The program buys up lower-yielding treasury securities with printed money in order to keep interest rates near zero and incentivize investors into the equities market.

Thus far, any attempt to pull back before inflation runs rampant has resulted in blowback from the housing market, which underscores just how weak the sector has remains after more than 5 years since the financial crisis.

Written by
Data Journalism Editor

Rich, the People's Pundit, is the Data Journalism Editor at PPD and Director of the PPD Election Projection Model. He is also the Director of Big Data Poll, and author of "Our Virtuous Republic: The Forgotten Clause in the American Social Contract."

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