US Macro Updates

Key takeaway: Pending Home Sales increased in September, up 1.1% from August. This was a reversal from a sharp drop seen in the earlier month of 7.1%. Yet, even with the small rise this month, the residential sales market continues to remain soft. Some of the other indicators on the US residential sector in recent times – including the NAHB home builders confidence index – have also been falling. The shortage of inventory in existing homes has been a key feature in this market which has kept the new homes market going strong. However, with mortgage rates now above 8%, un-affordability is once again the dominant factor in the sector. Both, increased housing inventory and lower interest rates are seen as critical factors for a better performing US residential real estate market.  On the other hand, it was also worth noting that the latest September New Home Sales data from the Census Bureau had surprised to the upside. 

• Pending Home Sales Index increased 1.1% m-o-m to 72.6 in Sep (Expectations -1.8%)

28th Sep 2023

Key takeaway: Pending Home Sales registered a big slump of 7.1% in August. The Index decreased from 77.3 in July to 71.8 in August. The sharp drop is not surprising and in line with some of the other indicators on the US residential sector in recent times – including the NAHB home builders confidence index. The shortage of inventory in existing homes has been a key feature in this market which has kept the new homes market going strong. However, with mortgage rates well above 7%, un-affordability is once again the dominant factor in the sector. Both, increased housing inventory and lower interest rates are seen as critical factors for a better performing US residential real estate market.  

• Pending Home Sales Index decreased 7.1% m-o-m to 71.8 in Aug (Expectations -0.8%)

30th Aug 2023

Key takeaway: Pending Home Sales registered an increase of 0.9% in July, up from +0.3% in June. The Index increased from 76.9 in June to 77.6 in July. The shortage of inventory in existing homes has been a key feature in this market, coupled with significantly higher mortgage rates and reduced buyer affordability. Pending home sales are generally considered to be a leading indicator – compared to existing home sales. While the current pending home sales trend can be taken as an indicator of a continuing weak existing home sales market, it is also key to note that the Index has bottomed since the end of 2022 and is off the lows currently. All other indicators of the US housing market have also been suggesting a bottoming of the US housing downturn. 

• Pending Home Sales Index increased 0.9% m-o-m to 77.6 in Jul (Expectations -0.6%)

27th Jul 2023

Key takeaway: Pending Home Sales registered a modest increase of 0.3% in June, up from negative 2.5% from May. The Index increased from 76.6 in May to 76.8 in June. The shortage of inventory in existing homes has been a key feature in this market, coupled with significantly higher mortgage rates and reduced buyer affordability. Pending home sales are generally considered to be a leading indicator – compared to existing home sales. While the current pending home sales trend can be taken as an indicator of a continuing weak existing home sales market, it is also key to note that the Index has bottomed since the end of 2022 and is off the lows currently. All other indicators of the US housing market have also been suggesting a bottoming of the US housing downturn. 

• Pending Home Sales Index increased 0.3% m-o-m to 76.8 in Jun (Expectations -0.5%)

29th Jun 2023

Key takeaway: Pending Home Sales dropped in May, down 2.7% from April. The Index fell from a downwardly revised 78.6 in April to 76.5 in May. Pending home sales are now 22% below the same period last year. The shortage of inventory in the existing homes has been a key feature in this market, coupled with significantly higher mortgage rates and reduced buyer affordability. Given that pending home sales are considered to be a leading indicator – compared to existing home sales – the current pending home sales trend is still indicative of a weak existing home sales market and can be taken as an indicator of a continuing weak existing home sales market.

• Pending Home Sales Index decreased 2.7% m-o-m to 76.5 in May (Expectations -0.4%)

26th May 2023

Key takeaway: Pending Home Sales recorded no change in April. The Index remained at 78.9. Hence, there wasn’t much to note on a month to month basis. However, the big picture story remains the same. Pending home sales are significantly below pre-pandemic averages. The shortage of inventory in the existing homes has been a key feature in this market, coupled with significantly higher mortgage rates and reduced buyer affordability. Given that pending home sales are considered to be a leading indicator – compared to existing home sales – the current pending home sales trend is still indicative of a weak existing home sales market.  can be taken to be an indicator of continuing slowdown in the existing home sales market.

• Pending Home Sales Index remained the same of 78.9 in Apr (Expectations +0.5%)

27th Apr 2023

Key takeaway: The Pending Home Sales Index unexpectedly tumbled in March after rising for the previous consecutive 3 months. The data though unexpected is not entirely surprising. The shortage of inventory in the existing homes has been a key feature in this market, coupled with significantly higher mortgage rates and reduced buyer affordability. Given that pending home sales are considered to be a leading indicator – compared to existing home sales – the current data point can be taken to be an indicator of continuing slowdown in the existing home sales market.

• Pending Home Sales Index decreased 5.2% to a level of 78.9 in Mar (Expectations 0.5%)

29th Mar 2023

Key takeaway: Pending home sales improved in Feb for a 3rd month in a row. Although the gain was not very large (0.8% m-o-m), it was still higher than consensus expectations (minus 2.3%) and on the back of a big 8.1% gain in Jan 2023. Mortgage rates had eased off in January and early Feb only to climb back up again in the second half of Feb. The housing market, after a disastrous second half of 2022, is showing multiple signs of stabilization and this latest release of pending home sales also attests to that. The different picture emerging in the west and east was also evidenced by increases in the 3 US regions (north-east, mid-west and south) and declines in the west.

• Pending Home Sales Index increased 0.8% to a level of 83.2 in Feb (Expectations -2.3%)