Tuesday, February 03, 2009

Pending Home Sales: December 2008

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for December showing a 2.1% year-over-year gain in pending home sales nationally primarily driven by a 17.5% increase in pending sales seen in the heavily foreclosure laden markets of the west region.

Meanwhile, the NAR leadership has redoubled their efforts in groveling for TARP money with NAR president Charles McMillan suggesting that more needs to be done by the federal government to support home prices.

“We can’t take our eye off the need to stimulate housing, which can set the foundation for an economic recovery, … Last week’s actions in the House to eliminate the repayment feature on the first-time home buyer tax credit, and to raise mortgage loan limits, are helpful. However, we need to take additional steps to meaningfully draw down inventory and stabilize home prices”

The following chart shows the national pending homes sales index since 2005 compared monthly. Notice that each year, the months value is decreasing fairly consistently (click for larger version).

The following chart shows the national pending home sales index along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005 (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.

Look at December’s seasonally adjusted pending home sales results and draw your own conclusion:

  • Nationally the index increased 2.1% as compared to December 2007.
  • The Northeast region declined 14.5% as compared to December 2007.
  • The Midwest region declined 1.2% as compared to December 2007.
  • The South region increased 1.6% as compared to December 2007.
  • The West region increased 17.5% as compared to December 2007.