US existing home sales fell short of forecasts in January. The market expected 4.15 million sales, but the actual result was 3.91 million.<\/p>\n
This was a month-on-month reading for existing home sales. The data indicates weaker turnover than anticipated for the month.<\/p>\n
The miss on January’s existing home sales confirms the housing market is struggling under high financing costs. With the average 30-year fixed mortgage rate recently ticking back over 7.1%, affordability remains a significant barrier for buyers. We see this as a clear signal that demand is weakening more than anticipated.<\/p>\n
This slowdown is a key piece of data for the Federal Reserve, suggesting the restrictive policies held through 2025 are working. We believe this weak report increases the odds that the Fed may pivot to a rate cut sooner than markets had priced in. Traders should now be pricing in a higher probability of a mid-year policy change, moving away from the “higher for longer” narrative.<\/p>\n
For the coming weeks, this points toward a bearish stance on housing-related equities. We are considering put options on homebuilder ETFs like XHB and home improvement retailers, as they are directly exposed to this cooling trend. Looking back at the slowdowns in 2023 and 2024, these sectors were quick to react to negative housing data.<\/p>\n
Conversely, the prospect of an earlier Fed pivot makes bets on falling interest rates more attractive. This strengthens the case for call options on long-duration Treasury bond ETFs like TLT, as their value increases when yields drop. It could also provide a lift for rate-sensitive tech and growth stocks that have been hampered by the high-rate environment.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" January US existing home sales missed forecasts: 3.91 million versus 4.15 million expected, signaling weaker turnover.<\/p>\n","protected":false},"author":62,"featured_media":17021,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41726","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41726","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=41726"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41726\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17021"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=41726"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=41726"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=41726"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}