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Economy in Brief

U.S. Pending Home Sales Edge Up in March
by Gerald D. Cohen  April 30, 2018

The National Association of Realtors (NAR) reported that pending sales of existing homes increased 0.4% (-3.0% year-on-year) in March to an index level of 107.6 (2001=100). Sales have slowed somewhat with the first quarter averaging 106.4 versus 109.7 in the fourth quarter and 108.9 for the entirety of 2017. The National Association of Realtors noted that while demand is strong, buyers are constrained by a limited inventory of housing. One indicator of that inventory constraint is the months' supply of new single-family homes, which declined to 5.2 months in March, below the 45-year median of 5.8 months.

Pending sales rose 2.4% (-6.0% y/y) in the Midwest and 2.5% (0.3 y/y) in the South. Meanwhile sales in the Northeast dropped 5.6% (-8.1% y/y) and were down 1.1% (-2.2%) in the West. Pending sales in the South are at their highest level in 12 years, while sales in the West touched a nearly four-year low.

The pending home sales index measures when the sales contract for an existing home is signed, analogous 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. In developing the pending home sales index, the NAR found 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. The months' supply of new single-family houses for sale dates back to 1963 and can be found in the USECON database.

Pending Home Sales (SA, 2001=100) Mar Feb Jan Mar Y/Y % 2017 2016 2015
Total 107.6 107.2 104.3 -3.0 108.9 110.2 108.9
Northeast 90.6 96.0 87.0 -8.1 97.1 96.4 97.1
Midwest 101.3 98.9 98.2 -6.0 104.7 107.9 104.7
South 128.6 125.5 122.0 0.3 123.6 123.3 123.6
West 94.7 95.8 96.5 -2.2 99.4 102.7 99.4
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