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Economy in Brief

U.S. Pending Home Sales in July Reversed June Gain
by Tom Moeller September 9, 2008

The National Association of Realtors reported that the July change in pending sales of existing homes reversed about half of the prior month's increase. The decline of 3.2% was larger than Consensus expectations for a 1.3% 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 lower sales in the West, -10.6% m/m, accounted for much of the July decline following improvement earlier this year. Sales in the North east also fell by 7.5% and that reversed the improvement during the prior four months. Sales in the Midwest rose 2.8% but have moved sideways so far this year. Sales in the South remained unchanged versus June but year-to-date have shown some improvement.

The Realtors association indicated in an earlier report that the number of homes on the market & available for sale rose a not seasonally adjusted 3.9% (2.4% y/y) after a 0.3% uptick during June.

At the current sales rate there was an 11.2 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 median sales price of an existing single family home fell 1.3% (-7.7% y/y) during July and prices were down 8.0% from their peak in June of last year.

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.

Pending Home Sales (2001=100)  July June Y/Y 2007 2006  2005
Total 86.5  89.4    -6.8% 95.7 112.1  124.3
  Northeast 73.6 79.6 -13.2 85.6 98.5 108.3
  Midwest 81.6 79.4 -2.4 89.6 102.0 116.4
  South 93.7 93.7 -13.3 107.3 127.3 134.8
  West 90.3 101.0 6.5 92.1 109.5 128.6
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