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Economy in Brief

U.S. Pending Home Sales Decline Throughout the Country
by Tom Moeller  January 29, 2020

U.S. pending home sales fell 4.9% (+4.6% y/y) during December, according to the National Association of Realtors (NAR). The shortfall was the second in the last three months. During all of 2019, the average index level of 105.7 was 1.0% higher than in 2018 when the index declined 4.0%.

Sales declined in each region of the country last month. They fell 5.5% (+7.4% y/y) in the South, the third consecutive monthly decline. In the West, sales were 5.4% lower (+7.0% y/y) and have moved irregularly sideways for almost a year. Midwest sales fell 3.6% (+1.3% y/y), the second decline in three months. Sales in the Northeast declined 4.0% (-0.1% y/y) to the lowest level since May.

The pending home sales index measures sales at the time the contract for the sale of 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, which is a month or two later. Accordingly, in developing the pending home sales index, the NAR found that the level of monthly sales contract activity precedes the level of closed existing home sales by one to 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 and from the Wall Street Journal compilation in USECON.

Pending Home Sales (SA, 2001=100) Dec Nov Oct Dec Y/Y % 2019 2018 2017
Total 103.2 108.5 107.2 4.6 105.7 104.7 109.1
   Northeast 92.4 96.3 96.4 -0.1 93.1 92.4 97.1
   Midwest 98.8 102.5 101.5 1.3 99.9 100.2 104.9
   South 118.1 125.0 125.3 7.4 123.8 121.6 123.9
   West 93.1 98.4 93.3 7.0 93.5 92.3 99.5
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