January Pending Home Sales

  • NAR released a summary of pending home sales data showing that January’s pending home sales are down modestly 2.5 percent from last month but slightly improved 1.4 percent from a year ago. January’s pending sales reveal a slow beginning to the year with the South being the only region to have gains in pending sales of 0.3 percent from last month.
  • Pending sales are homes that have a signed contract to purchase on them but have yet to close. They tend to lead existing-home Sales data by 1 to 2 months.
  • All regions showed increases from a year ago except the South, which had a decline of 1.3 percent. The Northeast saw the biggest gain from a year ago at 10.9 percent while the West had the smallest gain at 0.4 percent.
  • From last month, the Midwest had the largest decline at 4.9 percent while the West followed with a decline of 4.5. The Northeast had the smallest dip in pending sales at 3.2 percent.
  • The pending home sales index level was 106.0 for the US.
  • The 100 level is based on a 2001 benchmark and is consistent with a healthy market and existing-home sales above the 5 million mark.
  • Despite a steady start to the year for existing-home sales, a slow start for 2016 pending sales implies that there could be some weakness ahead in existing-home sales. An improvement in inventory levels would help combat price acceleration and provide potential home buyers more options, possibly reversing the slow start to the year.