Pending Home Sales Point Toward Continued Trouble for Housing

Pending home sales, generally considered a good leading indicator for final home sales fell -7.6% in January, supporting recent weakness in both existing and new home sales.  This result was well below the consensus forecast calling for a monthly increment of 1.8%.  This data reiterates my view that that the housing recovery will face significant headwinds over the months ahead as interest rates begin to rise and the newly extended home buyer tax credit proves to be impotent in bringing new buyers into the market.