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Economy in Brief

U.S. Pending Home Sales Decline in December
by Tom Moeller  January 29, 2021

• Pending home sales fall for fourth consecutive month.

• Sales are mixed across the country.

Pending home sales eased 0.3% (+21.4% y/y) in December, after falling 2.5% in November, according to the National Association of Realtors (NAR). Sales were 5.6% below their August peak.

Pending home sales rose strongly only in the Northeast where they increased 3.1% (22.1% y/y) after falling by a like amount in November. It was the first increase in three months. Sales in the South edged 0.1% higher (26.6% y/y) after declining 0.9% in November. Sales in the West held steady (18.9% y/y) after falling 4.7% in November while sales in the Midwest slid 3.6% (+13.9% y/y), the fourth consecutive m/m decline.

The pending home sales index measures sales at the time the contract for the purchase 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. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about 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) Dec Nov Oct Dec Y/Y % 2020 2019 2018
Total -0.3 -2.5 -0.9 21.4 7.1 1.1 -4.1
   Northeast 3.1 -3.3 -5.9 22.1 3.1 0.8 -5.0
   Midwest -3.6 -3.1 -0.7 13.9 7.8 -0.3 -4.6
   South 0.1 -0.9 0.5 26.6 8.9 1.8 -1.9
   West 0.0 -4.7 0.0 18.9 5.9 1.3 -7.3
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