Day 2: It's Not Home Sales
Mother's Little Helper took a tumble today, $ -3,259.02 (-0.65%).
US stocks were lower today. Why? I don't really care, it's only day 2, if you're worried you're not grasping the concept of buy and hold; we've bought, now we're holding. But for those who want a more thoughtful response, it's simple. We're at the end of the year, many of us just went back to work and the rest of us who are still on vacation aren't sitting around thinking about the stock market (or blogging about it). Some investors who wanted to capture some gains sold, but there just weren't very many investors in the market today doing a lot of buying. In stock market terms there wasn't enough volume or conviction to push prices up.
Today was also the day that "Pending Home Sales" data was released and the numbers weren't very good. The markets seemed to view the decline as a 'surprise' and started blaming interest rate increases, lack of inventory. Nonsense! If you’re selling stocks on this news, blame yourself. I like chocolate but I don’t buy more every month. Likewise home sales will not increase every month, quarter or year. There will always be times when home sales slowdown and people put their money to work in different ways. It's the end of the year, our credit cards are maxed out and we're all busy with family. Across the country average home prices are essentially flat, but when you look at specific markets home prices are highly inflated.
- I think it's reasonable that home buyers aren't aggressively buying during the holidays.
- I think it's reasonable that as home prices have risen that buying has slowed.
- I think it’s reasonable that sales at home improvement centers are down as home sales slow.
- I think it’s reasonable that home sales don’t go up every month.
We’re all taking a breath.