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Pending Home Sales
"The NAR's Pending Home Sales Index (PHSI) is released during the first week of each month. It is designed to be a leading indicator of housing activity. The index measures housing contract activity. It is based on signed real estate contracts for existing single-family homes, condos and co-ops. A signed contract is not counted as a sale until the transaction closes." - National Association of Realtors
  • USA

Main Indicator: Pending Home Sales m/m

Most Recent Release

July
8th, 2008
Actual Forecast Previous Revised Form
-4.7% -2.4% 7.1% 6.3%

For May
Provided by: National Association of Realtors
Current Release: Press Release

Pending Home Sales y/y: 14.0%, pr. -13.1%

The latest Pending Home Sales Index showed that the housing market is still adjusting, falling a faster than expected 4.7% to 84.7. The decline continues to be very regional. In fact there are pockets of real estate that are hot, especially in the West. Lawrence Yun, NAR chief economist said "Some markets have seen a doubling in home sales from a year ago, while others are seeing contract signings cut in half. Price conditions vary tremendously, even within a locality, depending upon a neighborhood’s exposure to subprime loans."

House prices are very attractive at the moment, but existing home sales growth is forecasted to be modest for the rest of the year. Construction activity is also projected to be limited in the current economic environment, with the high inventory of homes and rising commodity prices.
Yun's projection of pending home sales:
New-home sales are likely to fall 32.3 percent to 525,000 in 2008 and decline another 3.4 percent next year to 507,000. “In light of high inventory conditions, rising commodity prices and construction costs will curtail new home construction deep into 2009,” Yun said. Housing starts, including multifamily units, will probably fall 28.7 percent to 966,000 this year, and then drop another 9.0 percent in 2009 to 879,000.

Table of Past Data

10/211/1312/101/82/73/64/85/76/97/8
Actual-6.5%2.0%0.6%-2.6%-1.5%0.0%-1.9%-1.0%6.3%-4.7%
Forecast-2.0%-2.5%-1.0%-0.7%-1.0%-1.0%-0.8%-1.0%-0.5%-2.4%
Previous-10.7%-6.5%1.4%3.7%-3.0%-1.2%0.3%-2.8%-1.0%7.1%
Revised From-12.2%N/A0.2%0.6%-2.6%-1.5%0.0%-1.9%N/A6.3%

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Past Releases

June
9th, 2008
Actual Forecast Previous Revised Form
6.3% -0.5% -1.0% N/A

Seasonally adjusted annual rate for April
Provided by: National Association of Realtors
Official Release: Press Release
Official Release: PDF

Pending Home Sales y/y: -13.1%

The seasonal rebound in home sales seem to be preceding expectations, as the NAR showed a rush of home buyers. The NAR forecasted a flat spring followed by recovery in summer. The South and Western regions saw these gains, while the Northeast and Midwest regions continue to see decline. It doesn't seem plausible that these are all buyers for home ownership, so the increase probably has a large component of investors who find house prices to be at bargain rates.

May
7th, 2008
Actual Forecast Previous Revised Form
-1.0% -1.0% -2.8% -1.9%

Seasonally adjusted annual rate for March
Provided by: National Association of Realtors
Official Release: Press Release

Pending home sales, a forward looking indicator for the housing market, continued to decline in March, as expected. Since March of 2007, the figures fell 20.1%. The decline should be flat or lighter in the Spring months as this is usually a period of recovery in the housing market. Then summer months should bring some positive figures.

After a correction to start the week, the greenback is continuing its strength. The Fed pause is essentially locked in, and inflation is becoming more significant and further limits the posibility of a Fed cut.

From the Release:

"A flat pattern in home sales activity should continue for the next couple months before improving over the summer, according to the latest forecast by the National Association of Realtors®.

Lawrence Yun, NAR chief economist, said the extent of an expected recovery hinges on better access to affordable loans. "Things are beginning to improve, but the availability of affordable mortgages is uneven around the country and sometimes within metropolitan areas," he said. "As anticipated, we continue to look for a soft first half of the year, for both housing and the economy, before notable improvements in the second half. Some time is needed for FHA and new conforming jumbo loans to become widely available."

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in March, edged down 1.0 percent to 83.0 from a downwardly revised level of 83.8 in February, and was 20.1 percent lower than the March 2007 index of 103.9."

 

April
8th, 2008
Actual Forecast Previous Revised Form
-1.9% -0.8% 0.3% 0.0%

Seasonally adjusted annual rate for February
Provided by: National Association of Realtors

The number of pending home sales, contracts to buy previously owned homes, declined 1.9% in February. Its an indication that the housing market recession continues, and the bottom is not here yet. The likely outcome is that housing prices continue to fall in the US and the Fed will remain pressured to continue its campaign of lowering interest rates.

March
6th, 2008
Actual Forecast Previous Revised Form
0.0% -1.0% -1.2% -1.5%

Seasonally adjusted annual rate for January
Provided by: National Association of Realtors

"The volume of existing-home sales is expected to hold steady through late spring, with a gradual recovery during the second half of the year as the mortgage situation improves in high-cost areas, according to the latest forecast by the National Association of Realtors®. Lawrence Yun, NAR chief economist, said many buyers have been waiting for higher mortgage loan limits. “The higher loan limits for both FHA and conventional loans will increase consumer choice and provide greater access to lower interest rate mortgages in high-cost regions,” he said. “Therefore, a notable rise in home sales can be anticipated in the second half of the year."

Pending Home Sales recorded a flat reading for January, surprising forecasts. December's total was revised up slightly as well. The recession in the housing market has fueled many of the problems in the US economy and the credit crunch that has reverberated around the world. A recovery in the housing sector would go a long way in helping to turn the tide of recent malaise in the US. Another month or two of flat or increasing pending home sales may suggest that the housing recession has hit a bottom, and that it may recover as we get later into 2008. The Mortgage Bankers Association reported today however that US mortgage foreclosures rose to an all-time high at the end of 2007. 

February
7th, 2008
Actual Forecast Previous Revised Form
-1.5% -1.0% -3.0% -2.6%

Seasonally adjusted annual rate for December
Provided by: National Association of Realtors
Official Release

"The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in December, slipped 1.5 percent to a reading of 85.9 from a downwardly revised index of 87.2 in November, and was 24.2 percent below the December 2006 level of 113.3. “We’re seeing a pattern that is consistent with skimming along the bottom of the cycle, and sales could ease modestly,” Yun said."

A continuation of soft market conditions is forecast for existing-home sales in the months ahead, with improvement expected by the second half of this year if loan limits are increased, according to the latest forecast by the National Association of Realtors®.

Lawrence Yun, NAR chief economist, said sales activity is expected to remain soft through the first half of the year despite a generational low in mortgage interest rates. “Household formation was only half of what it should have been last year given the demographics of a growing population and sustained job growth, so there clearly is a pent-up demand from buyers who are on the sidelines,” he said.

“Existing-home sales have moved narrowly since last September, but when the full impact of higher loan limits for conventional mortgages begins to impact the market there is likely to be a notable rise in home sales and prices. If higher limits are enacted very quickly, we’ll see a faster and more meaningful recovery by expanding safe, affordable financing in high-cost areas – that, in turn, would help to stimulate overall economic activity.”

January
8th, 2008
Actual Forecast Previous Revised Form
-2.6% -0.7% 3.7% 0.6%
Seasonally adjusted annual rate for November.
News Release from National Association of Realtors

"Over the next few months, existing-home sales are expected to hold fairly steady as indicated by pending sales activity, then rise later in the year and continue to improve in 2009, according to the latest forecast by the National Association of Realtors®."

Last month's data was revised strongly up to 3.7% from 0.6%. The index was 19.2% below the November 2006 level.
December
10th, 2007
Actual Forecast Previous Revised Form
0.6% -1.0% 1.4% 0.2%
For October

Both the current and previous figures surprised. Contracts signed in October beat expectations of a 1.0% drop. The data from the previous release was also revised up from 0.2% to 1.4% gain. These numbers suggest the housing market may be bottoming. However, expect these numbers to be flat or depressed in for the upcoming winter months.
November
13th, 2007
Actual Forecast Previous Revised Form
2.0% -2.5% -6.5% N/A
For September
October
2nd, 2007
Actual Forecast Previous Revised Form
-6.5% -2.0% -10.7% -12.2%
For August.

Pending Home Sales Index 85.5, pr. 91.4.

Pending Home Sales in August fell to 85.5, a 6.5% (seasonally adjusted) decrease from July’s 91.4, reported the National Association of Realtors. Pending Sales track contract signings, before a transaction is carried out to purchase an existing home. Economists use this indicator to predict future activity in the housing sector, and it is another blow to a beleaguered US housing sector. The fact that credit is harder to come by is having a direct effect on closings, and the NAR reports that about 10% of deals fell through in the final moments. Today’s 85.5 is a record low for the indicator, which was established in 2001.

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