U.S. Pending Home Sales Improve Moderately in February
by:Tom Moeller
|in:Economy in Brief
Summary
- Modest increase follows sharp decline.
- Regional changes are mixed.
The Pending Home Sales Index from the National Association of Realtors increased in February by 1.6% (-7.0% y/y) to 75.6 after declining 4.7% in January to 74.4, revised from a 4.9% decline. The weakening followed a 5.7% December increase. Sales were 40.9% below the peak in August 2020. The index reflects sales contract signings.
The rise in February sales occurred as the average rate on a 30-year mortgage increased to an average 6.78% from 6.64% in January. This rate was well above a low of 2.68% averaged in December 2020.
Pending home sales were regionally mixed last month. Sales in the Midwest rose 10.6% (-2.6% y/y) after falling 7.5% in January. Sales in the South increased 1.1% (-8.5% y/y) following a 7.3% January decline. Sales in the Northeast eased 0.3% (-9.0% y/y) following a 0.8% January rise. Sales in the West declined 6.5% (-7.9% y/y) in February after a 0.5% January improvement.
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 WEEKLY database.
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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