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Economy in Brief

U.S. Pending Home Sales Stable At Their Highest Level Since September
by Tom Moeller July 1, 2009

The moderate rebound in housing activity continued last month. The National Association of Realtors reported that May pending sales of existing homes held roughly stable with April at the highest level since last September. Consensus expectations had been for a slight 0.5% increase in May sales.

Last month's stability in overall home sales was reflective of gains in two of the country's regions and declines in the other two. In the Northeast sales rose slightly to the highest level since November of 2007. In the West sales recovered further from the February low. Elsewhere, sales in the Midwest fell slightly but were at their highest since mid-2007 while sales in the South fell as well m/m.

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.

The latest monthly gains in home sales have been accompanied by some stability in home prices. The median sales price of an existing home increased 3.8% in May (-16.8% y/y) and prices have been flat-to-up slightly so far this year. That latest increase reduced slightly the affordability index of a home but it nevertheless remained up by 32.2% year-to-year and by three quarters from the 2006 low. The latest level was near the record high for the series which extends back to 1970.

The Realtors Association indicated in an earlier report that the number of homes on the market and available for sale slipped m/m and was down 15.3% versus one year earlier. At the current sales rate there was a 9.6 months' supply of homes on the market which was near the lowest since August 2007 but still up from the 8.9 months supply during all of 2007 and 6.5 months during 2006. At the high, there was a 10.4 months supply during all of last year.

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

Bank Credit Standards from the Federal Reserve Bank of Philadelphia is available here.

Pending Home Sales (2001=100)  May April Y/Y 2008 2007 2006 
Total 90.7 90.6    6.7% 86.8 95.8 112.1 
  Northeast 80.9 78.5 6.7 72.6 85.6 98.5
  Midwest 89.2 90.4 11.5 80.6 89.5 102.0
  South 92.6 94.2 7.9 89.8 107.3 127.3
  West 96.9 94.8 0.7 99.3 92.1 109.5
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