The Pending Home Sales Index for contracts signed in May 2008 on a seasonally adjusted basis was at 84.7 down 4.72% compared to April 2008 when it was at 88.9 and were down 14.01% compared to May 2007's figure of 98.5. Without seasonal adjustments, the index was down 14.64% compared to May 2007.
2001 was previously the slowest year for pending home sales on record. May 2008 was 17.38% below May 2001's sales pace. April 2008 was only 10.89% below the 2001 level. Lawrence Yun, NAR chief economist said that "some pullback after a sharp increase in the previous month was expected." Of course he didn't say that in last month's press release. The NAR raised their 2008 median home sales price forecast from $205,000 to $205,300. Last month they dropped their forecast by 4.1% from $213,700 to $205,000.
April, May and June are the three biggest months for Pending Home Sales. Afterwards, sales quickly taper off. Pending Home Sales for May indicates that the June and July existing sales will also be flat. Existing home sales seemed to have reached a bottom in terms of units sold while the Case-Shiller home price index shows prices are continuing to fall. It will be interesting to see what happens to home sales when the activity starts to lessen.
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