U.S. Pending Home Sales Rebound in June After Two Straight M/M Declines
Summary
- PHSI +4.8% in June vs. -1.9% in May; the first m/m rise since March.
- Home sales gain m/m in all four regions, w/ the highest m/m rate in the South (6.3%)
- Home sales decrease y/y in the Northeast, Midwest and South, but rebound y/y in the West (1.0%).
The Pending Home Sales Index, a forward-looking measure of home sales based on contract signings, rose 4.8% m/m to 74.3 in June following declines of 1.9% in May (-2.1% initially) and 7.7% in April (unrevised), according to the National Association of Realtors (NAR). The June reading was the first m/m gain since March and the largest since December. The year-on-year rate of decline was at -2.6% in June, less severe than -6.5% in May and -15.7% in June 2023. Nevertheless, the PHSI had fallen 40.6% since its October 2021 high of 125.1 and 42.0% since its August 2020 peak of 128.0.
The rebound in June sales occurred as the average rate on a 30-year mortgage fell to 6.92% in June, the lowest since March, after rising to 7.06% in May. However, those rates were higher than a low of 5.22% in August 2022 and well above a low of 2.68% in December 2020. Notably, weekly data showed the 30-year mortgage rate increased marginally to 6.78% in the July 25 week from 6.77% in the July 18 week.
Pending home sales rose m/m in June in all the four major regions in the country. Sales in the South rebounded 6.3% (-3.9% y/y) in June, the first m/m gain in three months, following a 5.2% decrease in May. Sales in the Midwest recovered 4.7% (-4.2% y/y), the first m/m increase since February, after a 0.4% May decline. Sales in the West rose 3.4% (1.0% y/y) in June on top of a 1.1% increase in May and sales in the Northeast grew 3.0% (-0.3% y/y) after a 1.1% May rise; both posted the third m/m gain in four months.
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.
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