U.S. Pending Home Sales Fall for the Seventh Time in Eight Months in June
Summary
• -8.6% m/m (-20.0% y/y) in June due to rising mortgage rates and housing prices impacting potential buyers.
• June PHSI at 91.0, lowest since April 2020.
• Sales fall m/m and y/y in all the major regions w/ the deepest in the West (-15.9% m/m; -30.9% y/y).
The Pending Home Sales Index fell 8.6% m/m (-20.0% y/y) to 91.0 in June after a 0.4% increase in May (+0.7% initially) and a 4.0% decline in April, according to the National Association of Realtors (NAR). The June m/m fall was the seventh in eight months to the lowest level since April 2020. Pending home sales have decreased 25.7% since the October 2021 peak. Purchasing a home in June was approximately 80% more expensive than in June 2019, the NAR reported, projecting that home sales will be falling 13% in 2022 and will begin to increase by early 2023.
Pending home sales decreased in all the major regions of the country in June. Sales in the West worsened 15.9% (-30.9% y/y) after a 4.9% drop. Sales in the South slid 8.9% (-19.2% y/y) following a 0.1% uptick. Sales in the Midwest fell 3.8% (-13.4% y/y) on top of a 2.9% decline. The West, South and Midwest regions experienced the sales decreases for the seventh time in eight months to the lowest levels since April 2020. Sales in the Northeast fell 6.7% (-17.6% y/y), the second m/m decline in three months, following a 15.4% rebound.
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.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has ~20 years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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