July 2017 Pending Home Sales Seasonally Adjusted Index Significantly Declines

The National Association of Realtors (NAR) seasonally adjusted pending home sales index significantly declined. Our analysis is more positive. The quote of the day from this NAR release:

… The reality, therefore, is that sales in coming months will not break out unless supply miraculously improves. This seems unlikely given the inadequate pace of housing starts in recent months and the lack of interest from real estate investors looking to sell …

Analyst Opinion of Pending Home Sales

The rolling averages are in positive territory. The data is very noisy and must be averaged to make sense of the situation. There is no signs of a surge in home sales, and the overall downward trends remain in play.

Pending home sales are based on contract signings, and existing home sales are based on the execution of the contract (contract closing).

The NAR reported:

Pending home sales index was down 0.8 % month-over-month and diwb 1.3 % year-over-year.

The market [from Bloomberg / Econoday} was expecting month-over-month growth of -0.2 % to 0.8 % (consensus +0.8 %) versus the negative 0.8 % reported.

Econintersect‘s evaluation using unadjusted data:

the index growth rate was down 1.0 % month-over-month and down 0.5 % year-over-year.

The current trend (using 3 month rolling averages) is improving..

Extrapolating the pending home sales unadjusted data to project August 2017 existing home sales would be down 0.5 % year-over-year for existing home sales.