U.S. Pending Home Sales Unexpectedly Decline in December
Summary
- Pending home sales -3.8% m/m, the second straight monthly drop and the largest since April.
- The December index at 117.7, the lowest level since September.
- Sales fall m/m and y/y in all the major regions with the deepest fall in the West (-10.0% m/m; -16.2% y/y).
The Pending Home Sales Index (PHSI) fell 3.8% m/m (-6.9% y/y) to 117.7 in December after a 2.3% decline in November (-2.2% initially) and a 7.5% rebound in October, according to the National Association of Realtors (NAR). For all of 2021, pending home sales rose 2.6% after having gained 6.9% in 2020 and 1.0% in 2019. The NAR reported that existing home sales are expected to fall 2.8% in 2022 with home prices expected to rise 5.1% “due to the ongoing housing shortage, even as builders ramp up production.”
Pending home sales decreased in all the major regions of the country in December. Sales in the West slid 10.0% (-16.2% y/y), the deepest m/m slide since February 2021, after a 2.1% decline. Sales in the Midwest fell 3.7% (-1.2% y/y), the third m/m fall in four months, after a 6.1% drop. Sales in the South decreased 1.8% (-3.9% y/y) on top of a 1.0% decline. Sales in the Northeast fell 1.2% (-10.5% y/y) following a 0.1% downtick.
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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