A bigger rise in March got more than wiped out by a drop in April. That’s how it goes with zigzagging month-to-month data.
By Wolf Richter for WOLF STREET.
There was a lot of housing-promo hoopla in the media this morning about that 4.0% month-to-month increase in pending sales of existing homes in August, sign of a sudden burst of demand due to lower mortgage rates, or whatever, written by goofballs or AI that never look at a chart.
That 4.0% month-to-month seasonally adjusted increase in the Pending Homes Sales Index by the National Association of Realtors today was off near-record low in the prior month, and was still down by 30.1% from August 2019 and by 42.7% from August 2020.
And the index was below March 2025, when there was a bigger widely ballyhooed surge in demand, or whatever, that was then more than wiped out by the sharp decline in April. That’s how it goes with zigzagging month-to-month data (historic data via YCharts):
Pending home sales compared to the Augusts in prior years:
- 2024: +3.8%
- 2023: +2.6%
- 2022: -15.4%
- 2021: -35.9%
- 2020: -42.7%
- 2019: -30.1%.
Pending sales are based on contract signings and track deals that haven’t closed yet and could still get canceled because buyers cannot afford homeowner’s insurance, or cannot sell their own home, or for other reasons. Signed contracts that then get cancelled are included in the pending sales here, but are not included in closed sales reported later.
And cancellations of signed deals are running high. Redfin reported that in July, 15.3% of all pending sales fell through, the highest rate for any July in Redfin’s data on cancellations going back to 2017.
Pending sales in all four regions zigzag along near record lows.
A map of the four Census Regions is posted in the comments below.
In the South, pending sales rose 3.1% in August from July, seasonally adjusted.
Compared to the Augusts of prior years:
- 2024: +4.2%
- 2023: +0.7%
- 2021: -36.0%
- 2020: -41.2%
- 2019: -28.8%.
In the West, pending sales rose by 5.0% in August from July.
Compared to the Augusts of prior years:
- 2024: unchanged
- 2023: +5.0%
- 2021: -42.6%
- 2020: -49.7%
- 2019: –39.1%.
In the Northeast, pending sales dipped by 1.1% month-to-month, seasonally adjusted.
Compared to the Augusts of prior years:
- 2024: +2.6%
- 2023: +1.1%
- 2021: -32.7%
- 2020: -44.3%
- 2019: -31.4%.
In the Midwest, pending sales rose by 8.7% in August from July, but July was the second-lowest in the data going back to 2010.
Compared to the Augusts of prior years:
- 2024: +6.7%
- 2023: +5.2%
- 2021: -31.8%
- 2020: -37.7%
- 2019: -23.3%.
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The four Census Regions of the US:
North South East or West… certainly looks like the same pattern to me. Encouraging ?? Not yet.
Think the only good news about the housing sales slow down the last 2 years is that the consumer economy is still somewhat holding up. People have been on the sidelines with housing for a while now the stand off between buyers and sellers and prices have not moved too much (unless over heated market). Think we will see healthy increase in 2026 in sales if Trumps Fed Chair pick can take another 1% off fed rate it will be even healthier.
yeah. Until the ultra low mortgages are paid off, there will be low sales volume. I still wonder who is holding these mortgage loans. It must feel lousy to lose money like this.
Ah……finally, some normalization is starting to creep into the market.
Anecdotal from here in the Great Lakes (Cleveland) region from someone who is house hunting in the $450-$650 range: homes still seem to be moving briskly, and concessions/price cuts are minimal.
From a colleague who is looking at the $1mm and up market, it seems that there are some relatively significant price cuts going on at the upper end of the market.
In my current neighborhood, 1700-2000 sq. ft. 1920s-1950s colonials and bungalows (inner ring suburbs) are moving pretty quickly in the $165-$250 range.
It is surprising prices have not fallen a lot more than they have with pending sales near 2012 levels. It’s like a tree branch that is weakening under pressure, but hasn’t snapped yet. When it does snap, look out below.
Hard to say, however in my area, there are a lot of people that are sitting out for lower rates. Reality would be the dollar lost a ton of value in 5ish years due to inflation and debasement of currency units. Places that intentionally restricted building are seeing the price cuts.
When this branch snaps, there will be another branch a little further down, and another branch after that. It’s not 2008. Long, slow, boring slog sideways for years to come.
People are definitely still buying and in some hot markets like SoCal, even though there’s drop, some of the transaction is simply bonker, makes you wonder if the people buying now are the last one in the crowd theatre before the fire or this is the new FOMO norm…
Case in point, saw a house in LB listed for 1.26M, sold for $1.3M on Refin and no the house is not under price to begine with. Surprise to still see selling over listing in this day and age without it being a bargain. Needless to say this will be a long drag out fight in some markets unfortunately, some like Austin…not so much.