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Economy in Brief
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Initial claims for unemployment insurance rose modestly by 9,000 to 745,000 in the week ended February 27...
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Revisions to nonfarm business sector productivity indicated a 4.2% decline during Q4'20...
EMU Unemployment Rate Steadies in January
The overall EMU unemployment rate was steady in January, off peak, but still elevated...
U.S. ADP Nonfarm Private Payroll Increase Disappoints in February
Job market strength moderated last month....
U.S. ISM Services Index Weakens in February
The ISM Composite Index of Services Activity declined to 55.3 during February...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Gerald D. Cohen May 30, 2019
The National Association of Realtors (NAR) reported that pending home sales fell 1.5% in April (-2.0% year-on-year), reversing some of March's 3.9% gain. Meanwhile, mortgage rates continue on their downtrend. The effective rate on a 15-year fixed-rate mortgage declined to 3.95% in April, the lowest level since the beginning of 2018. The declining trend in interest rates has had some positive impact on housing activity. Pending sales are up 5.7%, since the four-and-a-half year low reached at the end of last year.
The number of signed contracts in April declined in every region of the country except the Midwest. Pending sales dropped 2.5% in the South (-1.8% y/y), and fell 1.8% in both the Northeast and West (-2.1% and -1.5% y/y respectively). Meanwhile activity increased 1.3% in the Midwest (-2.4% 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 anticipates 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. Mortgage interest rates from the Mortgage Bankers Association can be found in the SURVEYW database.
Pending Home Sales (SA, 2001=100) | Apr | Mar | Feb | Apr Y/Y % | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|
Total | 104.3 | 105.9 | 101.9 | -2.0 | 104.7 | 109.1 | 109.8 |
Northeast | 88.9 | 90.5 | 92.1 | -2.1 | 92.4 | 97.1 | 96.4 |
Midwest | 96.8 | 95.6 | 93.2 | -2.4 | 100.2 | 104.9 | 107.4 |
South | 124.0 | 127.2 | 121.8 | -1.8 | 121.6 | 123.9 | 123.0 |
West | 93.5 | 95.2 | 87.5 | -1.5 | 92.3 | 99.5 | 102.3 |