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Economy in Brief

U.S. Pending Home Sales Decline Again, Reaching Lowest since Mid-2014
by Carol Stone, CBE  December 28, 2018

The National Association of Realtors (NAR) reported that pending home sales fell 0.7% in November, the second consecutive decline and the seventh in the eleven months so far this year. These sales are thus off 7.7% y/y, and at 101.4 in November (2001=100), the index is 10.3% below the peak in April 2016. It is also the lowest since 101.3 in June 2014.

The November decline in pending home sales nationwide included a mix by region. Sales in the West recovered 2.8% after their October drop of 8.9% and were off 12.2% from a year ago. Those in the Northeast grew 2.7% in November after a slim 0.3% rise in October; they were down 3.5% from November 2017. The South and the Midwest both had month-on-month declines in November, the South by 2.7% (-7.4% y/y) and the Midwest, 2.3% (-7.0% y/y)

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) Nov Oct Sep Nov Y/Y % 2017 2016 2015
Total 101.4 102.1 104.8 -7.7 109.0 109.8 108.8
Northeast 95.1 92.6 92.3 -3.5 97.2 96.4 90.8
Midwest 98.1 100.4 102.2 -7.0 104.8 107.4 107.1
South 115.7 118.9 120.2 -7.4 123.8 122.9 123.1
West 87.2 84.8 93.1 -12.2 99.6 102.4 102.2
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