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Economy in Brief

U.S. Pending Home Sales Rebound With Improved Weather
by Tom Moeller  April 28, 2014

Following eight straight months of decline, pending sales of single-family homes improved 3.4% during March, according the National Association of Realtors (NAR). The 0.5% February decline was revised from a 0.8% shortfall reported last month. Despite the increase, sales remained 12.1% below the peak last June. Expectations had been for a 1.0% rise, according to Bloomberg.

Home sales improved across most of the country last month. In the West, sales gained 5.7% (-11.1% y/y) following a 2.3% February rise. Nevertheless, sales remained down 20.8% during the last nine months. Home purchases in the South improved 5.6% (-5.3% y/y), a gain that made up three months of decline. Sales were 5.2% below the peak nine months ago. Purchases in the Northeast improved 1.4% (-5.9% y/y) and made up February's shortfall. Sales still were off by 12.5% since the peak in April of last year. In the Midwest, home buying slipped 0.8% (-10.1% y/y), the eighth decline in the last nine months. Sales were off 16.2% since the May peak.

The pending home sales figures are analogous to the new home sales data from the Commerce Department. They measure home sales when the sales contract is signed, not at the time the sale is closed. In developing the model for the index, the NAR demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months. The series dates back to 2001 and the data are available in Haver's PREALTOR database.

The Effect of Large Investors on Asset Quality: Evidence from Subprime Mortgage Securities from the Federal Reserve Bank of Atlanta can be found here.

Pending Home Sales (%, SA) Mar Feb Jan Y/Y 2013 2012 2011
Total 3.4 -0.5 -0.2 -7.9 4.5 11.3 1.3
Northeast 1.4 -1.6 2.3 -5.9 6.1 16.6 -4.0
Midwest -0.8 2.8 -2.7 -10.1 10.4 17.7 2.2
South 5.6 -3.6 3.1 -5.3 5.4 12.7 1.4
West 5.7 2.3 -4.8 -11.1 -3.6 1.2 3.4
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