Pending Homes Sales Fall to a 4 Year Low

Pending home sales unexpectedly dropped -4.9% in March, to the lowest level since March 2003. Versus a year ago, pending home sales have fallen 11.7% YoY. Pending home sales represent signed purchase agreements for existing homes, and usually lead closings by 1-2 months.

Tighter lending standards are probably partially to blame, as troubles in the subprime market have rippled through the system, and encouraged consumers to postpone purchases while they wait to see the impact on housing prices. Most economists are expecting house prices to decline this year.

Sales volume fell in three of the four national regions. The South and Midwest saw declines of around 7% MoM, and the Northeast experienced a 5% MoM drop. The West was the only region to show growth, at +1.6% MoM. Over the past year, the Northeast has seen the greatest decline in pending home sales, falling 15.4% YoY, while the South and Midwest have seen the smallest declines at around 10.4% YoY.