Economist's Insights

Pending Sales Continue to Point to Slowdown

Mar 1, 2017

January’s pending home sales data expanded the already-wide divergence between contract signings and actual closings. While trends in pending sales have historically been a good predictor of actual existing sales, they’ve been flashing caution signs for months about an easing of existing sales activity that has yet to materialize. Pending sales were much worse than expected, falling 2.8% MoM compared with expectations for a 0.6% gain. In addition, December’s 1.6% gain was halved in revisions. Pending sales are down 6.3% since peaking last April. However, over that same period, existing sales are up 3.8%. January’s results reinforce our view that housing activity is likely to slow from its 2016 pace.