Pending Home Sales report is an economic indicator that provides valuable insights into the future direction of the U.S. housing market
It looks at the number of contracts signed on existing homes, condos and co-ops. Since homes are typically under contract for a month or two before selling, the PHS leads the existing home sales report by a month or two.
What is a Pending Home Sales Report?
The Pending Home Sales Report tracks the number of U.S. home sales that are under contract but have not yet closed.
This report, published by the National Association of Realtors (NAR), is considered a forward-looking indicator of housing market activity as it provides insights into the future direction of the housing market.
The Pending Home Sales Index (PHSI) is an important component of the report. The index measures the change in pending home sales relative to the base period .
- Rising index values indicate an increasing number of pending home sales, which could ultimately lead to increased closing volumes and a strengthening housing market.
- A declining index value may indicate a softening market, with fewer sales expected to be transacted in the coming months.
Why are Pending Home Sales Reports Important?
Pending Home Sales Reports are Important for Here’s Why:
- Housing Market Health: Pending home sales are a barometer of future performance of the housing market. A rising PHSI typically signals an impending increase in transaction volume and a healthier housing market, while a falling PHSI can signal a slowdown in the economy.
- Economic Activity: Because pending home sales often result in closings, there can be ripple effects on other industries, including construction, finance, and consumer spending on home-related goods and services.
- Policy Decision: The Federal Reserve and other policymakers closely monitor the pending home sales report to gauge the health of the housing market and the broader economy. This information may influence interest rates, monetary policy and fiscal measures.
Who publishes the Pending Home Sales Report?
The Pending Home Sales Report is published by the National Association of REALTORS (NAR), the leading trade association representing real estate professionals in the United States.
NAR uses a large sample of Multiple Listing Service (MLS) data from across the country to compile the data based on the number of contracts that have been signed but have not closed.
When is the Pending Home Sales Report released?
The Pending Home Sales Report is typically released monthly and is available to the public through the National Association of Realtors’ website.
NAR provides press releases, summaries of findings, and historical data for interested parties to analyze and utilize in the decision-making process.
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