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Economy in Brief

U.S. Pending Home Sales Continue to Fall in March
by Tom Moeller  April 27, 2022

• Sales decline to lowest level since May 2020.

• Sales fall in most sections of the country.

The home buying market remains soft. The Pending Home Sales Index from the National Association of Realtors fell 1.2% in March (-8.2% y/y) following a 4.0% February fall, revised from -4.1%. It was the fifth consecutive monthly decline with total sales down 19.0% from the August 2020 peak.

Pending home sales declined throughout most of the country in March except the Northeast where they rose 4.0% (-9.2% y/y). Sales in the Midwest fell 6.1% (-4.8% y/y) to the lowest level since April 2020. In the West, sales eased 0.2% (-8.4% y/y) and were 21.7% below the August 2020 high. March sales in the South declined 0.9% (-9.5% y/y) to the lowest level since April 2020.

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.

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