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Economy in Brief

U.S. Pending Home Sales Remain Depressed by Winter Storms
by Tom Moeller  February 28, 2014

The National Association of Realtors (NAR) reported that pending sales of single-family homes ticked up 0.1% during January following a 5.8% December decline, revised from an 8.7% shortfall. The latest uptick followed six consecutive months of sharp decline. Therefore, sales were 14.3% below the peak last June. Expectations had been for a 1.8% rise according to Bloomberg. Data were revised back through 2011.

Home sales were mixed across the country last month. In the South, sales rose 3.5% (-5.5% y/y) following a 5.7% December drop. Sales remained down 7.7% from the May peak. In the Northeast, a 2.3% rise (-5.3% y/y) followed two months of sharp decline. Sales remained 12.3% lower than the peak last April. In the West, sales declined 4.8% (-17.5% y/y) and have fallen in each of the last seven months, a decline totaling more than one-quarter from the peak. In the Midwest, sales fell 2.5% last month (-9.3% y/y), off for the seventh straight month and down 17.6% from the May peak.

The pending home sales figures are analogous to the new home sales data from the Commerce Department. They measure home sales when the sales contract is signed, not at the time the sale is closed. In developing the model for the index, the NAR demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months. The series dates back to 2001 and the data are available in Haver's PREALTOR database.

Pending Home Sales (%) Jan Dec Nov Y/Y 2013 2012 2011
Total 0.1 -5.8 -1.2 -9.0 4.5 11.3 1.3
Northeast 2.3 -7.3 -2.0 -5.3 6.1 16.6 -4.0
Midwest -2.5 -5.2 -3.1 -9.3 10.4 17.7 2.2
South 3.5 -5.7 0.0 -5.5 5.4 12.7 1.4
West -4.8 -5.9 -0.3 -17.5 -3.6 1.2 3.4
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