Global| Sep 30 2020U.S. Pending Home Sales Climb Again
by:Sandy Batten
|in:Economy in Brief
Summary
• Pending home sales rise to record high in August. • Fourth consecutive monthly gain; sales rise in all four major regions. • Record highs in Midwest and South. Pending home sales rose for the fourth consecutive month in August, [...]
• Pending home sales rise to record high in August.
• Fourth consecutive monthly gain; sales rise in all four major regions.
• Record highs in Midwest and South.
Pending home sales rose for the fourth consecutive month in August, rising 8.8% m/m (+24.2% y/y) to a record high of 132.8 (2001=100), according to data released by the National Association of Realtors. While the August gain was still slower than the dramatic rebounds in May and June, it reflected a pickup in activity from the 5.9% m/m rise in July. The rise in home sales has been supported by the continued decline in mortgage rates with the rate on a 30-year mortgage in the Mortgage Bankers Association weekly survey falling to a record low in August.
Pending home sales rose again in all the major regions of the country. And while August gains were generally smaller than the rebounds in May and June, they were meaningfully stronger than those in July, apart from the Northeast. The largest monthly gain in August was in the West with pending sales up 13.1% m/m (+13.2% y/y) after a 6.8% monthly increase in July. Pending sales rose 8.6% m/m to new record highs in both the Midwest and the South. These series begin in 2001. From a year ago, sales were up 15.4% in the Midwest and 14.9% in the South. After an outsized 25.2% m/m jump in July, pending sales in the Northeast slowed sharply in August, gaining 4.3% m/m (+20.6%y/y).
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) | Aug | Jul | Jun | Aug Y/Y % | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Total | 8.8 | 5.9 | 15.8 | 24.2 | 1.1 | -4.1 | -0.8 |
| Northeast | 4.3 | 25.2 | 45.1 | 20.6 | 0.8 | -5.0 | 0.6 |
| Midwest | 8.6 | 3.3 | 12.2 | 15.4 | -0.3 | -4.6 | -2.5 |
| South | 8.6 | 0.9 | 12.3 | 14.9 | 1.8 | -1.9 | 0.6 |
| West | 13.1 | 6.8 | 11.7 | 13.2 | 1.3 | -7.3 | -2.5 |
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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