Economist's Insights

Pending Home Sales Offer Glimmer of Positivity in a Recent Run of Unspectacular Housing Data

Jul 30, 2018

Pending home sales, counted when contracts on existing homes are signed, rose in June for the first time since March. Total pending sales, a leading indicator for actual existing sales, rose 0.9% last month and offered a glimmer of hope for some stability in existing sales in the months ahead.

Contracts signed in the Northeast and Midwest rose at a slower pace than in May but pending sales in the South, the largest region by volume, rebounded 1.1% from the prior month’s 3.5% decline. Activity in the West was relatively steady. While the monthly improvement certainly provides a positive data point, less sanguine longer-term trends show how disappointing overall activity has been in recent years.

In addition, key headwinds remain that should make a more lasting turnaround tougher to achieve. Freddie Mac data showed the average 30-year mortgage rate offered to borrowers remains near the top of a seven-year range, 4.54% for the week ended July 26, and June’s existing sales report from last week showed prices at new records.