Pending Home Sales Index Rises As Expected

Existing home sales, the result of very tight supply, have been flat though today's pending home sales index, up an as-expected 0.5 percent in December, does point to improvement ahead.

The South is by far the biggest region in resale activity and pending sales rose 2.6 percent in the month for what is still a moderate 4.0 percent year-on-year rate. Sales in the West rose 1.5 percent in the month but are down a yearly 3.1 percent. Sales in the Northeast and Midwest were down in the month and flat to slightly negative on the year.

Overall pending sales are up only 0.5 percent from December 2016 (same rate as the monthly gain), quite a contrast to new home sales which rose 14 percent last year. Still, today's report is a positive for resales where imbalance, that is lack of homes on the market, has been a striking feature.

Recent History Of This Indicator:
Pending home sales have been doing a good job of tracking final sales of existing homes, jumping in October and then leveling off in November vs what proved to be an actual surge in November and slight dip back in December. The Econoday consensus for December's pending sales index is a solid gain of 0.5 percent.