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Economy in Brief

U.S. Pending Home Sales Unexpectedly Rose
by Tom Moeller August 7, 2008

The National Association of Realtors reported that the June level of pending sales of existing homes rose 5.3%. That reversed the 4.9% decline during May which was unrevised. The latest increase compared to Consensus expectations for a 1.0% drop.

These 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 regional sales figures indicated that sales in the South recovered all of their May decline with a 9.3% increase while sales in the Northeast nearly recovered two months of decline with a 3.4% rise. Sales in the Midwest posted a weak 1.3% rise on the heels of a 6.0% May drop and sales in the West continued to recover. They posted a 4.6% gain to the highest level in twelve months.

The Realtors association indicated in an earlier report that the number of homes on the market & available for sale ticked up a not seasonally adjusted 0.2% (2.8% y/y) after a 1.5% decline during May.

At the current sales rate there was an 11.1 months' supply of homes on the market versus an 8.9 months' average during all of last year, a 6.5 months' supply in 2006 and a 4.5 months' supply in 2005.

The pending home sales data are available in Haver's PREALTOR database and the number of homes on the market are in the REALTOR database.

Rational Real Estate from the Federal Reserve Bank of Richmond can be found here.

Pending Home Sales (2001=100)  June May Y/Y 2007 2006  2005
Total 89.0  84.5    -12.2% 95.7 112.1  124.3
  Northeast 79.6 77.0 -15.4 85.6 98.5 108.3
  Midwest 79.6 78.6 -13.3 89.6 102.0 116.4
  South 92.4 84.5 -16.6 107.3 127.3 134.8
  West 101.0 96.6 -1.8 92.1 109.5 128.6
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