COULD THIS BE THE LAST GASP FOR THE U.S. HOUSING MARKET?

U.S. pending home sales for September jumped 6.1% MoM; shouldn’t be a surprise given the possible expiry of the first-time homebuyer tax credit Yesterday, we received pending home sales data for September and they jumped 6.1% MoM on top of the 6.4% run-up in August.  This seems to be a last gasp flurry of activity (we saw this in the 9.4% surge in actual existing home sales for September that came out last week) ahead of the possible expiry of the first-time homebuyer tax credit in the U.S.  An extension of the program is working its way through the U.S. Congress and no doubt supporters will point to the data as showing that it works.  The recent dips we saw in new home sales, single-family permitsand the National Association of Home Builders housing market index do indeed offer a glimpse of what could happen (a renewed turndown in residential real estate activity) if the stimulus expires.

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