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Economy in Brief

U.S. Pending Home Sales Lower Still
by Tom Moeller January 6, 2009

For November, the National Association of Realtors indicated that pending sales of existing homes fell another 4.0%, about as they did during the prior two months. The October drop was revised sharply larger. Consensus expectations were for a 1.0% November decline.

The home sales figures are analogous to the new home sales data from the Commerce Department in that they measure existing home sales when the sales contract is signed, not at the time the sale is closed. The series dates back to 2001.

Sales in the Northeast were the weakest last month and they fell 7.2%. They're down 20.8% during the last three months. Sales in the Midwest suffered from the weakness in the auto industry and fell 6.7%, off 11.6% during the last three months. November sales in the South fell 2.2%, about as they did during October, and they are down 11.7% in the last three months while sales fell 2.4% in the West, 7.6% since August.

Weak home sales are encouraging potential sellers to keep their homes off the market. The Realtors Association indicated in an earlier report that the number of homes on the market and available for sale was about unchanged (-0.3% y/y) after three months of sharp decline.

At the current sales rate there was an 11.2 months' supply of homes on the market, higher than 8.9 months last year and 6.5 months during 2006. For single-family homes the months' supply rose sharply to 10.6, well above the 8.7 average of last year.

The pending home sales data are available in Haver's PREALTOR database and the number of homes on the market and prices are in the REALTOR database.

Pending Home Sales (2001=100)  November October Y/Y 2007 2006  2005
Total 82.3 85.7    -5.3% 95.7 112.1  124.3
  Northeast 63.2 68.1 -14.6 85.6 98.5 108.3
  Midwest 74.2 79.5 -10.1 89.6 102.0 116.4
  South 85.3 87.2 -12.7 107.3 127.3 134.8
  West 101.2 103.7 19.3 92.1 109.5 128.6
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