Global| Aug 04 2009U.S. Pending Home Sales Rise To The Highest Level In Two Years
by:Tom Moeller
|in:Economy in Brief
Summary
The rebound in housing activity grew stronger last month as mortgage rates remained low. The National Association of Realtors reported that June pending sales of existing homes jumped 3.6% from May to their highest level since June of [...]
The rebound in housing activity grew stronger last month as mortgage rates remained low. The National Association of Realtors reported that June pending sales of existing homes jumped 3.6% from May to their highest level since June of 2007. The gain easily outpaced Consensus expectations for a slight 0.6% increase in monthly sales.
Home sales rose last month in each of the country's regions, but they surged in the South and the West. In the South, sales jumped 7.1% m/m to lift them nearly nine percent from June of 2008. In the West, sales also were strong and posted a 7.1% gain. Though strong last month, sales have meandered sideways for the last year. In the Northeast, sales ticked up just 0.4% from May. That followed strong gains during three of the prior four months and left them at their highest in two years. Finally, sales in the Midwest also rose but by a slight 0.8% m/m; nevertheless, they were at their highest level since 2007.
These 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.
The latest monthly gains in home sales have been accompanied by improvement in prices. The median sales price of an existing home increased 4.1% in June (-15.4% y/y) and prices have risen 7.1% since December. That latest increase reduced the affordability index of a home but it nevertheless remained up by 29.9% year-to-year and by three-quarters from the 2006 low. The median price of an existing home rose to $181,600 (-15.0% y/y) and the average mortgage rate was 5.2%, down from 6.3% one year ago.
The Realtors Association indicated in an earlier report that the number of homes on the market and available for sale slipped m/m and was down 14.9% versus one year earlier. At the current sales rate, there was a 9.4 months' supply of homes on the market which was near the lowest since June 2007. However, it still was up from the 8.9 months supply during all of 2007 and 6.5 months during 2006. At the high, there was a 10.4 months supply during all of last year.
The pending home sales data are available in Haver's PREALTOR database. The number of homes on the market and prices are in the REALTOR database.
| Pending Home Sales (2001=100) | June | May | Y/Y | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|
| Total | 94.6 | 91.3 | 6.7% | 86.8 | 95.8 | 112.1 |
| Northeast | 81.2 | 80.9 | 5.9 | 72.6 | 85.6 | 98.5 |
| Midwest | 89.9 | 89.2 | 11.5 | 80.6 | 89.5 | 102.0 |
| South | 100.7 | 94.0 | 8.9 | 89.8 | 107.3 | 127.3 |
| West | 100.4 | 97.6 | -0.2 | 99.3 | 92.1 | 109.5 |
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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