This morning the National Association of Realtors released the March data for their Pending Home Sales Index. "Despite supply deficiencies in plenty of areas, contract activity was fairly strong in a majority of markets in March," according to the National Association of Realtors®. "This spring’s surprisingly low mortgage rates are easing some of the affordability pressures potential buyers are experiencing and are taking away some of the sting from home prices that are still rising too fast and above wage growth." (more here). The chart below gives us a snapshot of the index since 2001. The MoM change came in at 1.4%. Investing.com had a forecast of 0.5%.
Over this time frame, the US population has grown by 13.9%. For a better look at the underlying trend, here is an overlay with the nominal index and the population-adjusted variant. The focus is pending home sales growth since 2001.
The index for the most recent month is 13% below its all-time high in 2005. The population-adjusted index is 20% off its 2005 high.
Pending versus Existing Home Sales
The NAR explains that "because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing Home Sales by a month or two." Here is a growth overlay of the two series. The general correlation, as expected, is close. And a close look at the numbers supports the NAR's assessment that their pending sales series is a leading index.
For additional perspectives on residential real estate, here is the complete list of our monthly updates: