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Economy in Brief

U.S. Pending Home Sales Rise To Highest Since 2006
by Tom Moeller November 2, 2009

Housing demand is increasing faster than generally expected. The National Association of Realtors (NAR) reported that September pending home sales increased 6.1%. The gain was similar to the August increase and continued stronger than June's 3.6% and July's 3.2% gains. Consensus expectations had been for a slight m/m sales decline. The index level of 110.1 was at its highest since December 2006 and up 26.9% from the January low. The base for the index is 2001=100.

September sales likely were boosted by the pending expiration of an $8,000 first-time home buyers tax credit; due to expire later this month. Congress currently is considering extending the credit through April of next year.

In this report only the Northeast region of the country failed to participate in the September sales gain. Sales in the West jumped 10.2% after a 16.0% rise during August. The sales index here was at its all-time high. Elsewhere, sales in the Midwest gained 8.1% on top of a 3.1% rise in August. They were up more than one-third from the January low. Sales in the South were the laggards with just a 4.9% gain but they also were up one-third from the January trough. Sales in the Northeast slipped 2.0% during September, down for the second month in the last three but still 44.6% higher than the January low.

These 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 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.  

Pending Home Sales (2001=100)  September August July Y/Y 2008 2007 2006 
Total 110.1 103.8 97.6    21.1% 86.8 95.8 112.1 
  Northeast 83.6 85.3 78.8 16.9 73.1 85.9 98.9
  Midwest 98.2 90.8 88.1 17.7 80.6 89.5 101.9
  South 109.7 104.6 103.8 22.8 89.6 107.3 127.2
  West 143.8 130.5 112.5 23.6 99.5 92.3 109.6
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