Global| Nov 10 2008U.S. Pending Home Sales Retraced Most of August Rise; Trend Still Up
by:Tom Moeller
|in:Economy in Brief
Summary
The National Association of Realtors reported that September pending sales of existing homes fell 4.6% from the prior month. Sales had risen 7.5% during August. Consensus expectations were for a slightly more moderate m/m drop. [...]
The National Association of Realtors reported that September pending sales of existing homes fell 4.6% from the prior month. Sales had risen 7.5% during August. Consensus expectations were for a slightly more moderate m/m drop.
Despite the latest decline, the level of sales on a three-month basis was up 6.6% from its March low.
The home sales figures are analogous to the new home sales data from the Commerce Department in that they measure existing home sales when the sales contract is signed, not at the time the sale is closed. The series dates back to 2001.
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Across the country's regions the pattern of recent sales movements has been very erratic. Sales in the West led the September increase with a 3.7% m/m rise on the heels of an 18.4% spurt upward in August. The latest was the highest level of sales since early 2006. But that was all of the good news in the latest home sales report. Sales in the Northeast slumped 16.8% m/m to a new low for the series. Sales in the South fell 7.9% and the decline reversed most of the modest firming of sales during the prior three months. Home sales in the Midwest ticked down 0.7% though sales still were a moderate 12.4% higher than the March low.
Weak home sales are encouraging potential sellers to keep their homes off the market. The Realtors Association indicated in an earlier report that the number of homes on the market and available for sale fell a not seasonally adjusted 1.6% (-2.4% y/y) after a 5.2% August decline. That was the second y/y decline since early 2005.
At the current sales rate there was a 9.9 months' supply of homes on the market, the lowest since February but still higher than 8.9 months last year and 6.5 months during 2006. For single family homes the months' supply fell to 9.4, the lowest since March but still well above the 8.7 average of last year.
The median sales price of an existing single family home fell 5.7% (-9.0% y/y) during September. Prices were down 16.3% from their peak during June of last year. For single family homes, prices fell 5.6% (-8.6% y/y) and they were off 16.8% from last year's June peak.
The pending home sales data are available in Haver's PREALTOR database and the number of homes on the market and prices are in the REALTOR database.
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| Pending Home Sales (2001=100) | September | August | Y/Y | 2007 | 2006 | 2005 |
|---|---|---|---|---|---|---|
| Total | 89.2 | 93.5 | 1.6% | 95.7 | 112.1 | 124.3 |
| Northeast | 66.4 | 79.8 | -9.4 | 85.6 | 98.5 | 108.3 |
| Midwest | 83.3 | 83.9 | -3.1 | 89.6 | 102.0 | 116.4 |
| South | 89.0 | 96.6 | -11.3 | 107.3 | 127.3 | 134.8 |
| West | 113.6 | 109.5 | 39.6 | 92.1 | 109.5 | 128.6 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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