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Economy in Brief

U.S. Pending Home Sales Rebound in August
by Tom Moeller  September 29, 2021

• Overall sales rise to highest level since January.

• Sales increases regionally are broad-based.

Pending home sales strengthened 8.1% (-8.3% y/y) during August after falling 2.0% in July, revised from -1.8%. The Realtors Association reported that purchases improved as home supply picked up and price strength moderated.

The August sales rise was largest in the Midwest where sales rose 10.4% (-5.9% y/y) to the highest level in nine months. In the South, sales rose 8.6% (-6.3% y/y) to the highest level since January. Pending home sales in the West improved 7.2% (-9.2% y/y) and have rebounded 16.6% from a February low. In the Northeast, pending home sales improved 4.6% (-15.8% y/y) but have been moving sideways since January.

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, which is likely a couple of months after the sales contract has been signed. 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 are available in Haver's PREALTOR database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the SURVEYW database.

Pending Home Sales (SA, % chg) Aug Jul Jun Aug Y/Y % 2020 2019 2018
Total 8.1 -2.0 -2.0 -8.3 6.9 1.0 -4.1
   Northeast 4.6 -6.6 0.5 -15.8 2.5 0.7 -5.2
   Midwest 10.4 -3.4 0.5 -5.9 7.7 -0.3 -4.6
   South 8.6 -1.1 -3.2 -6.3 8.5 1.8 -1.8
   West 7.2 1.9 -4.0 -9.2 5.9 1.1 -7.3
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