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Economy in Brief

U.S. Pending Home Sales Decline to Four-Year Low
by Tom Moeller  November 29, 2018

The National Association of Realtors (NAR) reported that pending home sales during October declined 2.6% to the lowest level since July 2014. Sales were off 6.7% y/y and the fall reversed a little-revised September rise. The index level fell to 102.1 in October (2001=100) which was 9.6% below the peak in April 2016.

The decline in pending home sales was paced by an 8.9% fall (-15.3% y/y) in the West to the lowest level since September 2007. Pending home sales in the Midwest declined 1.8% (-4.9% y/y) to the weakest level in six months. In the South, pending home sales fell 1.1% (-4.6% y/y) and were at the lowest level since September of last year. Increasing by 0.7% (-2.9% y/y) were pending home sales in the Northeast. They remained 8.2% below the February 2017 high.

The pending home sales index measures sales at the time the 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.

Pending Home Sales (SA, 2001=100) Oct Sep Aug Oct Y/Y % 2017 2016 2015
Total 102.1 104.8 104.1 -6.7 109.0 109.8 108.8
Northeast 92.9 92.3 92.7 -2.9 97.2 96.4 90.8
Midwest 100.4 102.2 101.2 -4.9 104.8 107.4 107.1
South 118.9 120.2 121.3 -4.6 123.8 122.9 123.1
West 84.8 93.1 89.1 -15.3 99.6 102.4 102.2
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