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Economy in Brief

U.S. Pending Home Sales Fall Further in August
by Tom Moeller  September 28, 2022

• Sales are lowest since April 2020.

• Sales decline in most of the country.

The Pending Home Sales Index produced by the National Association of Realtors fell 2.0% (-24.2% y/y) to 88.4 in August following a 0.6% easing in July, revised from -1.0%. The August decline was the ninth in ten months. Pending home sales have fallen 30.9% since the August 2020 high.

Pending home sales declined in most regions in August, except the West where they rose 1.4% (-31.3% y/y), up for the second straight month. Sales were 38.1% below the August 2020 peak. Sales in the South fell 0.9% (-24.2% y/y) after a 1.3% July drop. They were 29.4% below the August 2020 high. Sales in the Northeast fell 3.4% (-19.0% y/y) following a 1.9% July shortfall. Sales were one-third below the August 2020 peak. Sales in the Midwest declined 5.2% (-21.1% y/y) in August after easing 0.5% in July. Sales fell 26.3% from the August 2020 high.

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.

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