The National Association of Realtors® (NAR) released the latest monthly data for its pending home sales index. The latest index unexpectedly edged higher to 77.6, representing a 0.9% increase from last month. This is the second straight month pending home sales have increased and is higher than the expected -0.6% decline. Pending home sales are down 14.0% compared to one year ago.
"The small gain in contract signings shows the potential for further increases in light of the fact that many people have lost out on multiple home buying offers," said NAR Chief Economist Lawrence Yun. "Jobs are being added and, thereby, enlarging the pool of prospective home buyers. However, rising mortgage rates and limited inventory have temporarily hindered the possibility of buying for many."
Pending Home Sales Background
The pending home sales index (PHSI) was created by the National Association of Relators to track home sales where the contract is signed, but the transaction has not yet closed. An index of 100 is equal to the level of contract activity in 2001. The PHSI is a leading economic indicator of future existing home sales.
The chart below gives us a snapshot of the index since 2001, the first year data was analyzed. 
Over this time frame, the US population has grown by 18.1%. For a better look at the underlying trend, here is an overlay with the nominal index and the population-adjusted variant. The focus is pending home sales growth since 2001.
The above chart shows the percent off turn-of-the-century values. The index for the most recent month is currently 42% below its all-time high from August 2020. The population-adjusted index is 46% off its high from July 2005.
