Recent Updates

  • Korea: Construction Starts (Oct)
  • Japan Regional: Income by Prefecture (2019)
  • Markit: Composite PMIs: Australia (Nov)
  • Australia: PCI by State (Nov)
  • more updates...

Economy in Brief

U.S. Pending Home Sales Fall for the Seventh Time in Eight Months in June
by Winnie Tapasanun  July 27, 2022

• -8.6% m/m (-20.0% y/y) in June due to rising mortgage rates and housing prices impacting potential buyers.

• June PHSI at 91.0, lowest since April 2020.

• Sales fall m/m and y/y in all the major regions w/ the deepest in the West (-15.9% m/m; -30.9% y/y).

The Pending Home Sales Index fell 8.6% m/m (-20.0% y/y) to 91.0 in June after a 0.4% increase in May (+0.7% initially) and a 4.0% decline in April, according to the National Association of Realtors (NAR). The June m/m fall was the seventh in eight months to the lowest level since April 2020. Pending home sales have decreased 25.7% since the October 2021 peak. Purchasing a home in June was approximately 80% more expensive than in June 2019, the NAR reported, projecting that home sales will be falling 13% in 2022 and will begin to increase by early 2023.

Pending home sales decreased in all the major regions of the country in June. Sales in the West worsened 15.9% (-30.9% y/y) after a 4.9% drop. Sales in the South slid 8.9% (-19.2% y/y) following a 0.1% uptick. Sales in the Midwest fell 3.8% (-13.4% y/y) on top of a 2.9% decline. The West, South and Midwest regions experienced the sales decreases for the seventh time in eight months to the lowest levels since April 2020. Sales in the Northeast fell 6.7% (-17.6% y/y), the second m/m decline in three months, following a 15.4% rebound.

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.

large image