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Economy in Brief

U.S. Pending Home Sales Ease in November
by Carol Stone, CBE  December 29, 2021

• Decrease reverses some of prior month's advance.

• Sales weakest in Midwest, which had been strongest in October

Pending home sales decreased 2.2% in November (-2.7% y/y) after rising 7.5% in October. Apart from October's surge, sales were the highest since last January. These sales are measured at contract signing, as described below.

By region in November, sales fell in all four areas. They declined the most in the Midwest, 6.3% (+0.2% y/y), but they had been the strongest there in October, gaining 11.9%. The next largest November decline was in the West, 2.2% (-4.6% y/y) after a 2.5% increase in October. Sales fell 0.7% (-1.3% y/y) in the South after October's sizable 7.7% gain. Contract signings were little changed in the Northeast, -0.1%, but that was still 8.5% lower than November 2020; they had advanced 6.9% in October.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar 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 usually 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) Nov Oct Sep Nov Y/Y % 2020 2019 2018
Total -2.2 7.5 -2.4 -2.7 6.9 1.0 -4.1
   Northeast -0.1 6.9 -3.2 -8.5 2.5 0.7 -5.2
   Midwest -6.3 11.9 -3.5 0.2 7.7 -0.3 -4.6
   South -0.7 7.7 -2.1 -1.3 8.5 1.8 -1.8
   West -2.2 2.5 -1.4 -4.6 5.9 1.1 -7.3
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