Last week, the National Association of Realtors (NAR) released their Pending Home Sales Report for June 2007 showing a continuation of the historic decline to residential housing on a year-over-year basis, both nationally and in every region.
Additionally, the Northeast and Midwest regions have fallen back below 100 indicating that, seasonally adjusted, June’s home sales activity was BELOW the average activity recorded in 2001, the first year Pending Home Sales were tracked.
As usual, NARs Chief Economist, Laurence Yun takes a clumsy crack at false optimism insinuating that a bottom in declining demand may have already been reached and possibly even past.
“However, it is too early to say if home sales have already passed bottom, … Still, major declines in home sales are likely to have occurred already and further declines, if any, are likely to be modest given the accumulating pent-up demand.”
The following chart shows the national Pending Homes Sales Index since 2005 compared monthly. Notice that each year, the months value is decreasing consistently (click for larger version).
The following chart shows the year-over-year changes to the national Pending Home Sales index as well as comparing the latest results against the values seen in the peak year of 2005 (click for larger version).
The following chart shows the pending home sales index nationally and for each region tracked (click for larger version).
Note that in the above charts, I had to use the Not Seasonally Adjusted (NSA) data series as NAR changed the methodology for their Seasonally Adjusted (SA) series a while back and never republished the numbers. This is why none of the data appears to be breaking below a value of 100 because it’s the SA series that is now below 100.Keep in mind the current pending sales decline comes ON TOP of last years historic fall-off so the continued weakness is a sure sign that the decline is not ephemeral.
Look at the June seasonally adjusted pending home sales results and draw your own conclusion:
- Nationally the index was down 8.6% as compared to June 2006.
- The Northeast region was down 2.4% as compared to June 2006.
- The West region was down 5.5% as compared to June 2006.
- The Midwest region was down 8.2% as compared to June 2006.
- The South region was down 12.7% as compared to June 2006.
