Economists' Outlook

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November 2020 Pending Home Sales Index Declines by 2.6%

NAR released a summary of pending home sales data showing that November’s pending home sales pace declined 2.6% last month but rose 16.4% from a year ago. The U.S. pending home sales index level for the month was 125.7. November’s incline brings the pending index above the 100-level mark for the sixth consecutive month since February 2020.

Bar chart: Pending Home Sales Index, November 2019 to November 2020

Pending sales represent 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 four regions showed strong gains with double inclines from a year ago. The South had the biggest gain in contract signings of 21.3% followed by the Northeast with an increase of 15.3%. The Midwest had an incline of 14.1% followed by the West with the smallest gain of 10.4%.

Bar chart: November U.S. and Regional Pending Sales, 2020 and 2019

From last month, all four regions showed declines in contract signings. The South had a decline of 1.1% followed by the Midwest with a drop of 3.3%. The Northeast had a dip in contract signings of 3.3% followed by the West, which had the biggest decline of 4.7%.

Line graph: U.S. and Regional Pending Home Sales Index, January 2019 to November 2020

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.

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