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Economy in Brief

U.S. Pending Home Sales Decline in December and for All of 2014
by Tom Moeller  January 29, 2015

The National Association of Realtors (NAR) reported that pending sales of single-family homes declined 3.7% last month (+6.1% y/y) following a revised 0.6% November increase, last month reported as 0.8%. For all of last year, pending home sales declined 3.5% and reversed most of the 4.5% gain in 2013. These sales are reported as an index with 2001=100. The December value was 100.7, down 20.7% from the peak of 127.0 in April 2005. It nevertheless remained up by 30.6% from the recession low of 77.1 in June 2010.

Home sales in the Northeast fell 7.5% last month (+6.3% y/y) and nudged 0.4% lower for the full year. Sales in the West declined 4.6% in December (+6.3% y/y) and were off 6.9% during all of 2014. Home sales in the Midwest fell 2.8% (+1.9% y/y) and retreated 5.8% for the year. In the South, pending home sales declined 2.6% last month (+8.6% y/y) and fell 1.4% during the whole year.

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.

Pending Home Sales (%, SA) Dec Nov Oct Y/Y 2014 2013 2012
Total -3.7 0.6 -1.2 6.1 -3.5 4.5 11.3
Northeast -7.5 1.0 0.5 6.3 -0.4 6.1 16.6
Midwest -2.8 -0.5 -0.8 1.9 -5.8 10.4 17.7
South -2.6 1.3 -1.1 8.6 -1.4 5.4 12.7
West -4.6 0.4 -3.2 6.3 -6.9 -3.6 1.2
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