The Next Disappointing Economic Report: Existing Home Sales

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existing home sales
Justin Sullivan/Getty Images
By Patti Domm

Another soggy housing report is expected Friday.

January's existing home sales are scheduled to be reported at 10 a.m. Eastern time, and are expected to show a decline of 3.5 percent to 4.7 million, and nobody will be surprised if it is worse. The report follows this week's housing starts, which plunged 16 percent, a victim of bad winter weather.

"I think people are kind of looking past it at least in terms of housing, and thinking it's the weather," said Barry Knapp, head of equity portfolio strategy at Barclays.

Stocks rallied Thursday and bonds fell, as investors ignored a weak report from the Philadelphia Fed, which showed a plunge in new orders and a surprise contraction in manufacturing activity.

"The stuff coming out of the manufacturing sector is just as confusing as the stuff coming out [of] the construction and housing sector," Knapp said.

Traders said some of the buying activity was related to Friday's options expiration. The Dow (^DJI) jumped 92 points to 16,133 and the S&P 500 (^GPSC) was up 11 at 1,839.

"I think it's a very choppy picture in the very short term but housing is basically in good,
solid shape from an intermediate point of view," said Dick Hoey, BNY Mellon's (BK) chief economist. He said it's a positive that the housing market has cleared out a lot of inventory.

"When the rates spiked up, you kind of calmed down that intensity of strength and now the rates have come off a little bit. If you think about the spring season, going into summer, you've got fairly moderate mortgage rates and assuming the economy starts to come back in the spring, you'll start to get the psychology of 'gee, this is a chance to get reasonable mortgage rates.' "

He said he sees a lot of pent up demand for housing, which will get stronger as hiring picks up.

Besides home sales, there are also a few earnings Friday, including Charter Communications, Dish Network, Echostar, Eldorado Gold and Agrium. Other companies reporting include Pinnacle West, Graham Holdings and Starz.


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10 Comments

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Iselin007

The housing is going to follow the direction of the Middle Class which is in decline unless they only count the Upper Class percentile that can afford unreal lush palaces!

February 21 2014 at 10:50 AM Report abuse +1 rate up rate down Reply
greatqb44

the weather....uh huh

February 21 2014 at 10:06 AM Report abuse +1 rate up rate down Reply
alfredschrader

Also on here it says Boeing hasn't paid any income tax.
Boeing is a government defense contractor. Any expense a corporation has they roll into the cost of their products including tax expenses. They have too to stay in business. So if you tax Boeing, they will simply have to pass that expense right back onto the gov. It's pointless.
Plus any taxes levied on businesses, you and I pay it, even if they increase the taxes on toilet paper companies - you will pay the tax with each flush.

Instead of suffocating businesses with taxes we should help them. Then more corporations will locate in the US and hire people. Most medium corporations have at least a 100 million dollar payroll and the average Federal income tax rate is 18% so 18 million dollars a year of new money will go into our Treasury when a corporation locates in the US instead of in Malaysia.

February 21 2014 at 9:56 AM Report abuse rate up rate down Reply
progressivehoax

This Administration is like the Bad News Bears.

February 21 2014 at 9:53 AM Report abuse rate up rate down Reply
pfjw

Bottom line - mortgages are not for everybody - therefore house ownership is not for everybody. Full stop.

February 21 2014 at 9:49 AM Report abuse rate up rate down Reply
jrb359

Just think how much better things will be after 3 more long non-productive years.

February 21 2014 at 9:41 AM Report abuse -1 rate up rate down Reply
jdykbpl45

Obama's economy is lousy because his policies are failures!

February 21 2014 at 9:00 AM Report abuse +3 rate up rate down Reply
thomashollman19

It is hard to compete with goverment subsized breeding colonies being constructed in major cities around the country taxpayers being stabbed in the back again by goverment.WHY SAVE FOR A HOUSE be a bum the goverment will float you

February 21 2014 at 8:44 AM Report abuse +5 rate up rate down Reply
seattlewkr

It's the weather and it's the lack of money people have as a result of underemployment.

Giving away loans only helps people who already have money to make the monthly payments.

February 21 2014 at 8:30 AM Report abuse +2 rate up rate down Reply
1 reply to seattlewkr's comment
greatqb44

yep...the weather...yes indeed....uh huh....for sure

February 21 2014 at 10:05 AM Report abuse +1 rate up rate down Reply
k4jlp

WHO CARES?????

February 21 2014 at 8:15 AM Report abuse +1 rate up rate down Reply