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Economy in Brief

U.S. Pending Home Sales Improve Ahead of Coronavirus
by Tom Moeller  March 30, 2020

The National Association of Realtors (NAR) reported that pending home sales increased 2.4% in February (9.4% y/y) to the highest level since February 2017. Lower mortgage rates helped fuel the increase with the 15-year fixed-rate declining to 3.00%, the lowest level since late-2016.

The number of signed contracts in February increased in every region of the country. Pending home sales increased 4.6% (10.8% y/y) in the West and 4.5% (14.9% y/y) in the Midwest. Sales in the Northeast sales rose 2.8% (5.9% y/y) while in the South they edged 0.1% (7.1% y/y) higher.

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, % chg) Feb Jan Dec Feb Y/Y % 2019 2018 2017
Total 2.4 5.3 -4.3 9.4 1.1 -4.1 -0.8
   Northeast 2.8 2.2 -2.7 5.9 0.8 -5.0 0.6
   Midwest 4.5 7.4 -3.4 14.9 -0.3 -4.6 -2.5
   South 0.1 8.7 -3.8 7.1 1.8 -1.9 0.6
   West 4.6 -0.9 -7.1 10.8 1.3 -7.3 -2.5
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