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Economy in Brief

U.S. Pending Home Sales Decline Again in January
by Tom Moeller  February 25, 2022

• Pending home sales weaken to lowest level in nine months.

• Sales fall in most of country.

The Pending Home Sales Index from the National Association of Realtors fell 5.7% (-9.5% y/y) to 109.5 in January following a 2.3% December fall, revised from -3.8%. Earlier figures also were revised. It was the third consecutive monthly decline with sales down 14.5% from the August 2020 peak. The Realtors Association indicated, "With inventory at an all-time low, buyers are still having a difficult time finding a home."

Pending home sales declined in most major regions of the country. Sales in the Northeast weakened 12.1% last month (-16.7% y/y) after a 1.3% December decline. Sales in the South were off 6.3% during January (-8.7% y/y) to the lowest level in six months. January sales in the Midwest declined 5.9% both m/m and y/y. To the upside, sales in the West increased 1.5% (-9.7% y/y), the first increase in three months.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar 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, which is usually a couple of months after the sales contract has been signed. 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 are available in Haver's PREALTOR database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the SURVEYW database.

Pending Home Sales (SA, % chg) Jan Dec Nov Jan Y/Y % 2021 2020 2019
Total -5.7 -2.3 -2.9 -9.5 2.7 6.7 0.8
   Northeast -12.1 -1.3 -0.2 -16.7 1.2 2.4 0.5
   Midwest -5.9 -2.5 -7.5 -5.9 2.2 7.5 -0.5
   South -6.3 -0.3 -1.8 -8.7 4.1 8.3 1.6
   West 1.5 -7.6 -1.8 -9.7 1.7 5.5 0.8
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