Pending home sales in February rose 1.8% month-to-month but were down 0.8% from February of last year. That according to the realtors. Now, this count is based on contract signings.So, people out shopping during the month when mortgage rates were falling to multi-year lows. The average on the 30-year fixed even dipping below 6% briefly. That is not the case now.And the realtors did make note of that, saying the improved affordability could make a U-turn if oil prices and interest rates continue to rise. Now ...

Group 1: Dollar Index and Economic Indicators - The dollar index (DXY00) rose slightly by +0.02% on Monday, supported by stock market weakness and a stronger-than-expected November pending home sales report, which increased by +3.3% month-over-month against expectations of +0.9% [1][4] - The dollar faced downward pressure after the December Dallas Fed manufacturing outlook unexpectedly declined by -0.5 to -10.9, contrary to expectations of an increase to -6.0 [1][4] Group 2: Federal Reserve and Interest Rates - The markets are currently pricing in a 16% chance of a -25 basis point rate cut at the FOMC's next meeting scheduled for January 27-28, with expectations of a total -50 basis point cut by 2026 [2] - The Federal Reserve is increasing liquidity in the financial system by purchasing $40 billion a month in T-bills, which is contributing to the dollar's underlying weakness [3] Group 3: International Currency Movements - The euro (EUR/USD) fell by -0.03% on Monday due to a lack of progress in talks to resolve the Russian-Ukrainian war and lower Eurozone government bond yields, with the 10-year German bund yield dropping to a 3-week low of 2.824% [5] - The yen (USD/JPY) rose by +0.35% against the dollar, supported by indications from the December 19 BOJ meeting that further rate increases are likely due to Japan's low real interest rates [6]

Core Insights - The pending home sales index, which serves as a leading indicator for house sales based on contract signings, increased by 3.3% month-over-month in November, reaching a value of 79.2 [1] Group 1 - The increase in the pending home sales index suggests a potential uptick in housing market activity [1] - The current index level indicates a recovery trend in the housing market, which may influence future sales and pricing dynamics [1] - The month-over-month growth reflects positive sentiment among home buyers, potentially driven by favorable market conditions [1]

Core Insights - Lower mortgage rates and slowing price growth have led to a 3.3% increase in pending home sales in November, marking the largest rise in contract signings since early 2023, surpassing the expected 0.9% increase [1][2] - Year-over-year, contract activity has risen by 2.6%, with all regions experiencing an increase, particularly the West, which saw a 9.2% month-over-month gain [2][3] - The improving affordability in housing, driven by lower mortgage rates and faster wage growth compared to home prices, is encouraging buyers to enter the market [3][4] Market Conditions - The housing market has faced significant challenges since mid-2022 due to rising mortgage rates and increased home prices, which have excluded many potential buyers [4][5] - The average rate for a 30-year mortgage has been around 6.2% recently, down from a peak of 7% in early 2025, contributing to the recent uptick in market activity [5][6] - Despite the recent increase, home sales in 2025 are projected to be at or near three-decade lows, although a gradual normalization of the housing market is anticipated as inventory levels improve and mortgage rates decrease [6]

Market Trends - Pending home sales in October increased by 1.9% compared to September, exceeding expectations [1] - However, pending home sales were down 4% compared to October of the previous year [1] - The increase in sales may be attributed to falling mortgage rates in October, but rates rose again in November [2] - Housing supply remains relatively stagnant month-to-month and is currently weakening [2] Regional Analysis - Sales increased on a monthly basis in all regions except the West, which experienced a slight decrease [3] - The West is the most expensive region in the country [3] Seller Behavior - Nearly 85,000 US sellers removed their homes from the market in September, a 28% increase from the previous year and the highest level in eight years for that month [4] - Consumer sentiment may be influencing sellers' decisions to delist their properties [4]

Economic Indicators - March Personal Consumption Expenditures (PCE) showed a month-over-month change of 0.0%, which was -30 basis points below the previous month, while year-over-year PCE reached +2.3%, slightly above expectations but down 40 basis points from +2.7% in February [2] - Core PCE, excluding food and energy, also reported a month-over-month change of 0.0%, down from +0.1% projected and +0.4% reported a month ago, with a year-over-year figure of +2.6%, down from +3.0% the prior month [3] Housing Market - Pending Home Sales increased by +6.1% in March, surpassing the +1% expected and the upwardly revised +2.1% for February, marking the highest level since September of the previous year [4] - The South region led the increase with +9.8%, followed by the Midwest at +4.9% and the West at +4.8%, while the Northeast experienced a decline of -0.5% [5] Company Earnings - Meta Platforms reported Q1 earnings of $6.43 per share, exceeding the expected $5.22, with revenues of $42.31 billion surpassing the $41.22 billion estimate, and Daily Active People grew +6% year over year to 3.43 billion [6] - Microsoft reported Q1 earnings of $3.46 billion, beating the $3.20 billion estimate, with revenues of $70.1 billion exceeding the projected $68.4 billion, and Azure cloud sales increased by +20% to $42.4 billion [7] - Qualcomm's fiscal Q2 earnings were $2.85 per share, beating estimates by 3 cents, with revenues of $10.83 billion surpassing the $10.67 billion consensus, although a lower revenue guide for Q3 led to a -6.3% decline in after-market shares [8]