U.S. Pending Home Sales Drop in December Following Four Straight M/M Rises
Summary
- PHSI -5.5% (-5.0% y/y) in December vs. +1.6% (+6.2% y/y) in November.
- Widespread m/m falls in home sales, w/ the deepest drop in the West (-10.3%).
- Home sales down y/y in all four regions, w/ the largest decline in the Midwest (-6.9%).
The Pending Home Sales Index, a forward-looking measure of home sales based on contract signings, fell 5.5% m/m to 74.2 in December after a downwardly revised 1.6% increase to 78.5 in November (+2.2% & 79.0 initially) and a 1.8% gain in October (unrevised), according to the National Association of Realtors (NAR). The December reading was the first m/m fall since July and the lowest PHSI level since August. The year-on-year rate was -5.0% in December after +6.2% in November, registering the first negative y/y pace since August; this compared to a positive 1.6% in December 2023. The PHSI had fallen 40.7% since its October 2021 high of 125.1 and 42.0% since its August 2020 peak of 128.0. During all of 2024, pending home sales fell 3.0% after falling 16.1% in 2023 and 21.1% in 2022.
The m/m fall in December pending home sales occurred as the average rate on a 30-year mortgage fell to 6.72% in December after rising to 6.81% in November (highest since July). These rates, while below their recent high of 7.62% in October 2023, had remained higher than a low of 5.22% in August 2022 and well above a record-low 2.68% in December 2020.
Pending home sales dropped m/m in December in all four major regions. Sales in the West slid 10.3% (-5.1% y/y) in December, the first m/m slide since July, after a 0.5% increase in November. Sales in the Northeast dropped 8.1% (-1.3% y/y) following a 1.3% November decrease and two consecutive m/m rises. Sales in the Midwest fell 4.9% (-6.9% y/y), the first m/m fall in five months, reversing a 0.4% November increase. Sales in the South decreased 2.7% (-5.1% y/y), the first m/m decline since August, following a 3.7% November gain.
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 WEEKLY database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
More Economy in Brief
Global
