by Dave Kranzler, Investment Research Dynamics:

Housing market update – Redfin posted data this past week that reflects the degree to which home sales activity is tanking. In June, 15% of home purchase contracts were canceled and 20% of listings nationwide had price cuts. Both metrics are the highest on record for June. In addition, and this is pertinent to CRE and multi-family housing (ABR), new apartments are taking longer to rent out because a near-record of them are hitting the market (new con-struction multi-family units).

The pending home sales index for July rose 4.8% in June from May but declined 2.6% YoY. The not seasonally adjusted numbers showed a 7.8% decline YoY. That comp likely is more reflective of the YoY decline because it doesn’t contain statistical errors in the “adjustments” calculus. The July increase over June is likely just a statistical bounce because the pending home sales index had been trolling record low levels going back to 2001, which is when the data series began. It also correlates with the brief bounce in mortgage purchase applications during mid-June. Pendings are based on contracts signed during June.