US: Existing home sales likely to post 1.6% m-o-m increase in January - Nomura

Analysts at Nomura forecast a 1.6% m-o-m increase in US existing home sales to an annualized pace of 5660k in January.

Key Quotes

“Pending home sales, which track contract signings that precede existing sales (which track contract closings), increased by 0.5% and 0.3% m-o-m in December and November, respectively, supporting a slight increase in existing home sales in January. There is some downside risk to our forecast from an unusually cold start to January, which may have dampened contract closing activity, although warmer weather returned towards month-end.”

“Looking ahead, ongoing supply shortages continue to put downward pressure on pending and existing home sales, clouding the medium-term outlook. As job and income gains remain firm, buyer demand should stay high, resulting in continued demand in excess of available supply and worsening affordability. Inventory at the current sales pace is 3.2 months, the lowest level since the National Association of Realtors (NAR) started the measure in 1999.”