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Takeaway: Pending home sales rose further in November, which, in turn, raises our expectations for future home price appreciation.

Housing Demand Continues to Grow

November's Pending Home Sales data was surprisingly strong. While it didn't eclipse expectations by much, the 1.7% MoM increase comes on the heels of an unusually strong 5.0% MoM increase in October. Our demand model for projecting future home price changes uses pending home sales to forecast price changes 18 months out. Based on this morning's reading, we're increasing our expectation for upside to +18.1% (from +17.1%) over the next 18 months, or roughly 1%/month. Currently, prices are rising at a rate of 60 bps per months.

HOUSING: FULL STEAM AHEAD FOR PENDING HOME SALES - Pending Home Sales ST

HOUSING: FULL STEAM AHEAD FOR PENDING HOME SALES - Pending Home Sales LT

Joshua Steiner, CFA

Robert Belsky