Pending Home Sales Fall in July

Pending home sales fell a larger than expected -3.2% MoM in July (consensus -1.5%, prior revised up to +5.8% from +5.3%). Pending home sales tend to precede existing home sales by 1-2 months, and represents previously owned houses under signed sales contracts, but which have not yet closed. For this reason, pending home sales are viewed as a leading indicator for the housing market. Sales in the Northeast fell by -7.5% MoM and fell an even larger -10.6% MoM in the West. The South saw no change in pending home sales in July, and the Midwest experienced an increase of +2.8% MoM. Over the past year, pending home sales have fallen -6.5% nationally. Both the Northeast and the South have seen a decline of -13.1% from a year ago, while the Midwest is down -3.1% YoY. The West continues to be the strongest region over the past year, with pending home sales rising +9.2% YoY. Part of the strength in the West is due to the large number of foreclosed homes being sold. Many foreclosed homes in Florida are still mired in the court system. There continues to be a large excess supply of homes on the market, and prices remain under pressure due to the rising number of foreclosures.