Pending home sales weak in August

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Conflicting signals: Weak pending home sales in August, but a rally in homebuilding shares. First pending sales, from Reuters via CNBC: ‘Pending sales of previously owned homes fell by a larger-than-expected 6.5% in August as more borrowers seeking home loans were turned away by cautious lenders, a real estate trade group said on Tuesday.’

More: ‘Notably, more than 10% of sales contracts fell through late in the process largely due to borrower trouble securing credit, according to an NAR survey. ‘The impact was greater in high-cost markets that are more dependent on jumbo mortgages. In some areas, as much as 30% of signed contracts were falling through in August when the credit crunch problem peaked,’ NAR Senior Economist Lawrence Yun said in a statement.’

But shares in homebuilding companies rallied Tuesday on hopes that the housing market is near a bottom. Reuters via CNBC: ‘Homebuilder stocks rallied for a second consecutive day as investors gambled that the struggling U.S. housing market, with a chance of further interest-rate cuts, may have bottomed out and now is the time to buy, investors said.’

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