The Pending Home Sales report serves as an economic indicator that provides important insights into the anticipated trends of the housing market in the United States. It focuses on the number of signed contracts for existing homes, condominiums, and cooperatives. Since a home typically remains under contract for one to two months before the sale is finalized, the Pending Home Sales report precedes the Existing-Home Sales report by a month or two.

What is the Pending Home Sales report?

The Pending Home Sales report monitors the number of home sales in the United States where a contract has been signed, but the transaction has not yet been completed. Published by the National Association of Realtors (NAR), this report is regarded as a forward-looking indicator of housing market activity, offering insights into the future trajectory of the real estate market. A crucial element of the report is the Pending Home Sales Index (PHSI), which measures changes in pending home sales compared to a baseline period. An increase in the index value indicates a rise in pending home sales, which may eventually result in more closed sales and a stronger housing market. Conversely, a decline in the index value could suggest a weakening market with fewer sales anticipated in the upcoming months.

Why is the Pending Home Sales report important?

The Pending Home Sales report is significant for several reasons:

• Housing market health: Pending home sales act as a gauge for the future performance of the housing market. A rising PHSI generally indicates an impending increase in closed sales and a more robust real estate market, while a declining PHSI may suggest a slowdown.
• Economic activity: Since pending home sales often lead to closed sales, they can have a ripple effect on other sectors, including construction, finance, and consumer spending on home-related products and services.
• Policy decisions: The Federal Reserve and other policymakers closely observe the Pending Home Sales report to assess the health of the housing market and the broader economy. This information can influence interest rates, monetary policy, and fiscal strategies.

Who publishes the Pending Home Sales report?

The Pending Home Sales report is published by the National Association of Realtors (NAR), a prominent trade association that represents real estate professionals in the United States. The NAR compiles the data based on the number of contracts signed but not yet finalized, utilizing a large sample of Multiple Listing Services (MLS) data from across the nation.

When is the Pending Home Sales report released?

The Pending Home Sales report is generally released on a monthly basis and is accessible 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 those interested in analyzing and utilizing the information for their decision-making processes.