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Economy in Brief

U.S. Pending Home Sales Decline Sharply
by Tom Moeller  September 28, 2015

The National Association of Realtors (NAR) reported that pending sales of single-family homes declined 1.4% during August (+6.7% y/y) following an unrevised 0.5% July gain. Expectations were for a 0.4% increase according to Bloomberg. These sales are reported as an index with 2001=100. The August value was 109.4, up 41.9% from the June 2010 low.

Sales declines spread through most of the country. In the Northeast, sales fell 5.6% (+8.0% y/y). Sales in the South moved 2.2% lower (+5.3% y/y) and in the Midwest sales eased 0.4% (+6.2% y/y). Moving 1.8% higher were sales in the West (9.3% y/y).

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) Aug Jul Jun Aug Y/Y 2014 2013 2012
Total -1.4 0.5 -1.7 6.7 -4.4 5.0 11.8
Northeast -5.6 4.0 1.2 8.0 -1.4 7.0 17.6
Midwest -0.4 0.0 -3.2 6.2 -6.3 11.3 18.6
South -2.2 0.6 -3.0 5.3 -2.0 6.0 12.9
West 1.8 -1.3 0.5 9.3 -8.7 -3.8 1.5
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