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Economy in Brief

U.S. Pending Home Sales Post the Third Consecutive M/M Fall in November
by Winnie Tapasanun  December 30, 2020

• Pending home sales fall for the third straight month.

• Sales drop in all the major regions.

Pending home sales fell 2.6% (+16.4% y/y) in November, the third consecutive m/m fall, after a 0.9% drop in October, according to data released by the National Association of Realtors (NAR). The index level was at 125.7 (2001=100), an all-time high for November, down slightly from 129.1 in October but up impressively from a recent trough of 69.0 in April. The November m/m fall was mainly due to the shortage of inventory and fast-rising home prices.

Pending home sales dropped in all the major regions of the country in November. Sales in the Northeast fell 3.3% (+15.3% y/y) after a 5.9% drop. Sales in the Midwest slid 3.1% (+14.1% y/y), the third consecutive m/m slide, after a 0.7% decline. Sales in the South fell 1.1% (+21.3% y/y), reversing a 0.5% gain. Sales in the West decreased 4.7% (+10.4% y/y) following being unchanged.

The pending home sales index measures sales at the time the contract for the purchase of 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 leads the level of closed existing home sales by about two months. The series dates back to 2001, and the data are available in Haver's PREALTOR database. Mortgage interest rates from the Mortgage Bankers Association can be found in the SURVEYW database.

Pending Home Sales (SA, % chg) Nov Oct Sep Nov Y/Y % 2019 2018 2017
Total -2.6 -0.9 -2.0 16.4 1.1 -4.1 -0.8
   Northeast -3.3 -5.9 2.0 15.3 0.8 -5.0 0.6
   Midwest -3.1 -0.7 -3.2 14.1 -0.3 -4.6 -2.5
   South -1.1 0.5 -2.4 21.3 1.8 -1.9 0.6
   West -4.7 0.0 -2.6 10.4 1.3 -7.3 -2.5
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