NEW YORK (Reuters) - Contracts to purchase previously owned U.S. homes matched a two-year high in May, fueling optimism the housing market is poised for a recovery.
“It reversed the prior month’s decline, which was useful, and it’s consistent with a gradual improvement in demand. We’ve seen other housing demand numbers which have looked that way, and this seems to corroborate that improvement.”
JOE MANIMBO, SENIOR MARKET ANALYST, WESTERN UNION BUSINESS SOLUTIONS, WASHINGTON
“The pending home sales report builds on the positive housing numbers earlier this week and gives some hope that the housing sector could be on its way to recovery. The forex market though had a fairly muted response to the number and only because investors are focused squarely on the EU summit.”
JACOB OUBINA, SENIOR U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK
“The reality is that this is just an unwind of the massive decline from the previous month when sales got crushed. This indicator tends to be volatile so a large increase does not necessarily translate into sales, with underwriting standards stringent. Contract failure is relatively high. Sales will likely continue to bump around the bottom.”
OMER ESINER, CHIEF ANALYST, COMMONWEALTH FOREIGN EXCHANGE, WASHINGTON
“It looks like a pretty strong number that’s consistent with some other upside surprises in recent housing data. So that could get the market thinking the spring home buying season is off to a good start, which is positive for the economy. Whether that has much impact on trading right now is unlikely as we’re still being driven by Europe.”
LEN BLUM, MANAGING PARTNER OF WESTWOOD CAPITAL LLC IN NEW YORK
“This will probably contribute to the rally, but it is too early to get excited about the housing market. We have a massive amount in shadow inventory across the country. Until that overhang is removed the economy won’t recover.”
STOCKS: U.S. stocks hold onto earlier gains.
BONDS: Long-dated U.S. Treasury debt prices briefly erase small earlier gains.
FOREX: The dollar held onto earlier gains versus the euro.