Existing Home Sales Collapsed - The Reason Not to Worry

Last week provided some eye-catching real estate data, namely a severe dip in existing home sales for February. The National Association of Realtors (NAR) reports the data and speculated that the meaningful decline might be due to the tight inventory situation. However, I see a temporary issue at play in February that has since corrected. I expect that signals that the pace of home sales will be restored in short time. Real estate investors can rest easy, as I see this year’s expansion for housing intact. See more on why you can rest easy about the decline in existing home sales.

Housing Relative Shares	Year-to-Date
SPDR S&P 500 (NYSE: SPY)	+0.2%
SPDR S&P Homebuilders (NYSE: XHB)	-3.2%
iShares US Real Estate (NYSE: IYR)	+1.2%
Pultegroup (NYSE: PHM)	+2.2%
Toll Brothers (NYSE: TOL)	-13.9%
Bank of America (NYSE: BAC)	-18.8%
Wells Fargo (NYSE: WFC)	-9.7%
MGIC Investment (NYSE: MTG)	-17.2%
Radian Group (NYSE: RDN)	-12.0%
Investors Title (Nasdaq: ITIC)	-8.6%
iShares Mortgage Real Estate (NYSE: REM)	-1.4%
Invesco Mortgage Capital (NYSE: IVR)	-2.1%
New Residential Investment (NYSE: NRZ)	-3.7%

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only. Editor's Note: Article should interest investors in Investors Title (Nasdaq: ITIC), Freddie Mac (OTC: FMCC.OB), Fannie Mae (OTC: FNMA.OB), UltraShort Real Estate ProShares (NYSE: SRS), Ultra Real Estate ProShares (NYSE: URE), ING Clarion Global Real Estate Income Fund (NYSE: IGR), Xinyuan Real Estate Co. (NYSE: XIN), Rydex Real Estate Fund H (Nasdaq: RYHRX), T. Rowe Price Real Estate Fund (Nasdaq: TRREX), Toll Brothers (NYSE: TOL), Hovnanian (NYSE: HOV), D.R. Horton (NYSE: DHI), Beazer Homes (NYSE: BZH), Lennar (NYSE: LEN), K.B. Homes (NYSE: KBH), Pulte Homes (NYSE: PHM), NVR Inc. (NYSE: NVR), Gafisa SA (NYSE: GFA), MDC Holdings (NYSE: MDC), Ryland Group (NYSE: RYL), Meritage Homes (NYSE: MTH), Brookfield Homes (NYSE: BHS), Standard Pacific (NYSE: SPF), M/I Homes (NYSE: MHO), Orleans Homebuilders (AMEX: OHB), Vanguard REIT Index ETF (NYSE: VNQ), PNC Bank (NYSE: PNC), J.P. Morgan Chase (NYSE: JPM), Hooker Furniture (Nasdaq: HOFT), Ethan Allen (NYSE: ETH), Pier 1 Imports (NYSE: PIR), Williams Sonoma (NYSE: WSM), Home Depot (NYSE: HD), Lowes (NYSE: LOW), Nasdaq: XNFZX, Nasdaq: FSAZX, Avatar Holdings (Nasdaq: AVTR), Apartment Investment & Management (NYSE: AIV), Equity Residential (NYSE: EQR), Avalonbay Communities (NYSE: AVB), UDR Inc. (NYSE: UDR), Essex Property Trust (NYSE: ESS), Camden Property Trust (NYSE: CPT), Senior Housing Properties (NYSE: SNH), BRE Properties (NYSE: BRE), Home Properties (NYSE: HME), Mid-America Apartment (NYSE: MAA), Equity Lifestyle Properties (NYSE: ELS), American Campus Communities (NYSE: ACC), Colonial Properties (NYSE: CLP), American Capital Agency (Nasdaq: AGNC), Sun Communities (NYSE: SUI), Associated Estates (NYSE: AEC), PennyMac Mortgage (NYSE: PMT), Two Harbors (AMEX: TWO), Simon Property Group (NYSE: SPG).

A Rally for Real Estate - 25% Increase in Mortgage Applications for Home Purchases

The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey is a data point I often expose for anomalous factors, usually seasonal in nature. So when I read about a big year-over-year increase in mortgage applications for home purchases in the latest report my suspicion was aroused. However, after perusing through a pile of data, I found nothing of the sort. The year-to-year growth in activity has been sustained over recent reporting periods. Therefore I can confidently report that it truly reflects health in housing. See the full report on the healthy housing signal in mortgage activity.

Housing Relative Shares	02-10-16 to 12:40 PM ET
SPDR S&P 500 (NYSE: SPY)	+1.0%
SPDR S&P Homebuilders (NYSE: XHB)	+1.5%
iShares US Real Estate (NYSE: IYR)	+1.5%
Pultegroup (NYSE: PHM)	+1.4%
Toll Brothers (NYSE: TOL)	+1.0%
Bank of America (NYSE: BAC)	Unchanged
Wells Fargo (NYSE: WFC)	+0.3%
MGIC Investment (NYSE: MTG)	+3.4%
Radian Group (NYSE: RDN)	+1.4%
Investors Title (Nasdaq: ITIC)	+0.8%
iShares Mortgage Real Estate (NYSE: REM)	+0.5%
Invesco Mortgage Capital (NYSE: IVR)	+0.1%
New Residential Investment (NYSE: NRZ)	+0.2%

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only. Editor's Note: Article should interest investors in Investors Title (Nasdaq: ITIC), Freddie Mac (OTC: FMCC.OB), Fannie Mae (OTC: FNMA.OB), UltraShort Real Estate ProShares (NYSE: SRS), Ultra Real Estate ProShares (NYSE: URE), ING Clarion Global Real Estate Income Fund (NYSE: IGR), Xinyuan Real Estate Co. (NYSE: XIN), Rydex Real Estate Fund H (Nasdaq: RYHRX), T. Rowe Price Real Estate Fund (Nasdaq: TRREX), Toll Brothers (NYSE: TOL), Hovnanian (NYSE: HOV), D.R. Horton (NYSE: DHI), Beazer Homes (NYSE: BZH), Lennar (NYSE: LEN), K.B. Homes (NYSE: KBH), Pulte Homes (NYSE: PHM), NVR Inc. (NYSE: NVR), Gafisa SA (NYSE: GFA), MDC Holdings (NYSE: MDC), Ryland Group (NYSE: RYL), Meritage Homes (NYSE: MTH), Brookfield Homes (NYSE: BHS), Standard Pacific (NYSE: SPF), M/I Homes (NYSE: MHO), Orleans Homebuilders (AMEX: OHB), Vanguard REIT Index ETF (NYSE: VNQ), PNC Bank (NYSE: PNC), J.P. Morgan Chase (NYSE: JPM), Hooker Furniture (Nasdaq: HOFT), Ethan Allen (NYSE: ETH), Pier 1 Imports (NYSE: PIR), Williams Sonoma (NYSE: WSM), Home Depot (NYSE: HD), Lowes (NYSE: LOW), Nasdaq: XNFZX, Nasdaq: FSAZX, Avatar Holdings (Nasdaq: AVTR), Apartment Investment & Management (NYSE: AIV), Equity Residential (NYSE: EQR), Avalonbay Communities (NYSE: AVB), UDR Inc. (NYSE: UDR), Essex Property Trust (NYSE: ESS), Camden Property Trust (NYSE: CPT), Senior Housing Properties (NYSE: SNH), BRE Properties (NYSE: BRE), Home Properties (NYSE: HME), Mid-America Apartment (NYSE: MAA), Equity Lifestyle Properties (NYSE: ELS), American Campus Communities (NYSE: ACC), Colonial Properties (NYSE: CLP), American Capital Agency (Nasdaq: AGNC), Sun Communities (NYSE: SUI), Associated Estates (NYSE: AEC), PennyMac Mortgage (NYSE: PMT), Two Harbors (AMEX: TWO), Simon Property Group (NYSE: SPG).

Extraordinary Mortgage Application Activity

Published January 13

Followers of mine know I have been bullish real estate for some time and that I remain so for 2016. But I cannot sit idly by and allow for misconception about an extraordinary mortgage applications surge. It is not representative of anything fundamentally extraordinary for real estate, but rather reflects an anomaly. See more on the extraordinary mortgage application activity here.

Real Estate Relative Stocks	Wednesday 2:00 PM ET
SPDR S&P 500 (NYSE: SPY)	-1.5%
iShares US Real Estate (NYSE: IYR)	-0.1%
iShares Mortgage Real Estate  Capped (NYSE: REM)	-2.2%
SPDR S&P Homebuilders (NYSE: XHB)	-2.7%
PulteGroup (NYSE: PHM)	-1.9%
MGIC Investment (NYSE: MTG)	-2.1%
Investors Title (Nasdaq: ITIC)	-0.0%
Bank of America (NYSE: BAC)	-2.1%

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only. Editor's Note: Article should interest investors in Investors Title (Nasdaq: ITIC), Freddie Mac (OTC: FMCC.OB), Fannie Mae (OTC: FNMA.OB), UltraShort Real Estate ProShares (NYSE: SRS), Ultra Real Estate ProShares (NYSE: URE), ING Clarion Global Real Estate Income Fund (NYSE: IGR), Xinyuan Real Estate Co. (NYSE: XIN), Rydex Real Estate Fund H (Nasdaq: RYHRX), T. Rowe Price Real Estate Fund (Nasdaq: TRREX), Toll Brothers (NYSE: TOL), Hovnanian (NYSE: HOV), D.R. Horton (NYSE: DHI), Beazer Homes (NYSE: BZH), Lennar (NYSE: LEN), K.B. Homes (NYSE: KBH), Pulte Homes (NYSE: PHM), NVR Inc. (NYSE: NVR), Gafisa SA (NYSE: GFA), MDC Holdings (NYSE: MDC), Ryland Group (NYSE: RYL), Meritage Homes (NYSE: MTH), Brookfield Homes (NYSE: BHS), Standard Pacific (NYSE: SPF), M/I Homes (NYSE: MHO), Orleans Homebuilders (AMEX: OHB), Vanguard REIT Index ETF (NYSE: VNQ), PNC Bank (NYSE: PNC), J.P. Morgan Chase (NYSE: JPM), Hooker Furniture (Nasdaq: HOFT), Ethan Allen (NYSE: ETH), Pier 1 Imports (NYSE: PIR), Williams Sonoma (NYSE: WSM), Home Depot (NYSE: HD), Lowes (NYSE: LOW), Nasdaq: XNFZX, Nasdaq: FSAZX, Avatar Holdings (Nasdaq: AVTR), Apartment Investment & Management (NYSE: AIV), Equity Residential (NYSE: EQR), Avalonbay Communities (NYSE: AVB), UDR Inc. (NYSE: UDR), Essex Property Trust (NYSE: ESS), Camden Property Trust (NYSE: CPT), Senior Housing Properties (NYSE: SNH), BRE Properties (NYSE: BRE), Home Properties (NYSE: HME), Mid-America Apartment (NYSE: MAA), Equity Lifestyle Properties (NYSE: ELS), American Campus Communities (NYSE: ACC), Colonial Properties (NYSE: CLP), American Capital Agency (Nasdaq: AGNC), Sun Communities (NYSE: SUI), Associated Estates (NYSE: AEC), PennyMac Mortgage (NYSE: PMT), Two Harbors (AMEX: TWO), Simon Property Group (NYSE: SPG).