The Pending Home Sales report is an economic indicator that offers valuable insights into the future direction of the housing market in the United States
It looks at the number of signed contracts for existing houses, condos, and co-ops. Since a home is usually under contract for a month or two before it’s sold, the PHS leads the Existing-Home Sales report by a month or two.
What is the Pending Home Sales report?
The Pending Home Sales report tracks the number of home sales in the United States for which a contract has been signed but the transaction has not yet closed.
This report, published by the National Association of Realtors (NAR), is considered a forward-looking indicator of housing market activity, as it provides insights into the future direction of the real estate market.
The Pending Home Sales Index (PHSI) is a key component of the report. The index measures the change in pending home sales relative to a base period.
- An increase in the index value suggests a growing number of pending home sales, which may eventually lead to higher closed sales and a stronger housing market.
- A decrease in the index value could indicate a weakening market with fewer sales expected to close in the coming months.
Why is the Pending Home Sales report important?
The Pending Home Sales report holds significant importance for several reasons:
- Housing market health: Pending home sales serve as a barometer for the housing market’s future performance. A rising PHSI typically signals an upcoming increase in closed sales and a healthier real estate market, while a falling PHSI may indicate a slowdown.
- Economic activity: As pending home sales often lead to closed sales, they can have a cascading effect on other sectors, including construction, finance, and consumer spending on home-related goods and services.
- Policy decisions: The Federal Reserve and other policymakers closely monitor the Pending Home Sales report to gauge the health of the housing market and the overall economy. This information can impact interest rates, monetary policy, and fiscal measures.
Who publishes the Pending Home Sales report?
The Pending Home Sales report is published by the National Association of Realtors (NAR), a leading trade association representing real estate professionals in the United States.
The NAR compiles the data based on the number of contracts signed but not yet closed, using a large sample of Multiple Listing Services (MLS) data from across the country.
When is the Pending Home Sales report released?
The Pending Home Sales report is typically released on a monthly basis and is available to the public through the National Association of Realtors’ website.
The NAR provides a press release, a summary of the findings, and historical data for interested parties to analyze and utilize in their decision-making processes.