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Economy in Brief

U.S. Pending Home Sales Retreat
by Tom Moeller  August 29, 2018

The National Association of Realtors (NAR) reported that pending sales of existing homes declined 0.7% during July following a 1.0% June rise, revised from 0.9%. Sales fell to an index level of 106.2 (2001=100) and remained down 2.3% y/y. Sales were 6.0% below the peak in April of 2016.

Sales were mixed across the nation last month. Pending home sales in the South were off 1.7% (-0.9% y/y), the third decline in the last four months. Pending home sales in the West fell 0.9% last month (-5.8% y/y) and reversed the June rise. Working the other way last month were pending home sales in the Northeast which rose 1.0% (-2.3% y/y) to the highest level since December. Also improving in July by 0.3% (-1.5% y/y) were pending home sales in the Midwest, up 4.1% versus the low six months earlier.

The pending home sales index measures sales at the time the contract for an existing home is signed, analogous to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed. In developing the pending home sales index, the NAR found 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, 2001=100) Jul Jun May Jul Y/Y % 2017 2016 2015
Total 106.2 107.0 105.9 -2.3 109.0 109.8 108.8
Northeast 94.6 93.7 92.4 -2.3 97.2 96.4 90.8
Midwest 102.2 101.9 101.4 -1.5 104.8 107.4 107.1
South 122.1 124.2 122.9 -0.9 123.8 122.9 123.1
West 94.7 95.6 94.7 -5.8 99.6 102.4 102.2
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