Pending Home Sales Index Spikes

The NAR's Pending Home Sales Index rose nearly four points in March, giving some small room for optimism. Jobless initial claims fell slightly from the previous week. And Spain's long-term credit rating took a big hit, dropping from A to triple-B-plus.

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Pending home sales were up more than expected in March, according to the National Association of Realtors on Thursday, with its Pending Home Sales Index up to 101.4 for the month, compared with 97.4 in February (100 = 2001). The spike gave the organization a chance to be more optimistic than usual.

“The housing market has clearly turned the corner,” Lawrence Yun, NAR’s chief economist, noted in a cheerful statement. “Rising sales are bringing down inventory and creating much more balanced conditions around the county, which means home prices will be rising in more areas as the year progresses.”

For the NAR, pending means contracts signed, but no closings yet. The trouble with pending home sales as a guide to the future health of the housing market has been, at least over the last few years, the fact that a lot of sales fall through for one reason or another (but especially lenders who get cold feet). Whether that pattern remains true is still an open question.

Jobless Claims Drop Slightly

According to the U.S. Department of Labor on Thursday, initial jobless claims for the week ending April 21 barely budged, coming in at 388,000 for the week, a decrease of 1,000 from the previous week’s revised figure of 389,000. That total is higher than weekly totals during most of early 2012, but then again it wasn’t that long ago that anything below 400,000 was greeted with expressions of relief.

The four-week moving average, which is usually less flighty than the weekly numbers, actually moved more than the weekly number in this case. The four-week average was 381,750, an increase of 6,250 from the previous week’s revised average of 375,500, mainly because the last few weeks have seen an uptick every week in initial jobless claims.

One possibility is that the relatively mild winter in much of the United States encouraged employers to hire more than they might have otherwise. According to that idea, those jobs were essentially “brought forward” in January and February, and now hiring is slacking off a bit as a result.

Spanish Debt Downgraded

Standard & Poors took Spain’s long-term credit rating down two notches on Thursday, from A to triple-B-plus, and added the worrisome sidebar of a “negative outlook” to go along with the downgrade — meaning Spanish debt is likely to get another downgrade before too long. The country’s short-term ratings took a hit as well.

The devil is in the debt, according to S&P, and the various efforts of the EU and other concerned supernational entities haven’t been doing much to solve the Spainish debt problem. “In our view, the strategy to manage the European sovereign debt crisis continues to lack effectiveness,” the rating agency said in something of an understatement.

Despite the troubles in (seemingly) far-off Spain, Wall Street enjoyed an up day, with the Dow Jones Industrial Average gaining 113.9 points, or 0.87 percent, while the S&P 500 was up 0.67 percent and the Nasdaq advanced 0.69 percent, let by Amazon, which beat analysts’ consensus for its quarterly earnings by a whopping factor of four.