This morning the National Association of Realtors released the November data for their Pending Home Sales Index. Here is an excerpt from the latest press release:

The Pending Home Sales Index (PHSI),* www.nar.realtor/pending-home-sales, a forward-looking indicator of home sales based on contract signings, fell 2.6% to 125.7 in November, the third straight month of decline. Year-over-year, contract signings climbed 16.4%. An index of 100 is equal to the level of contract activity in 2001.

"The latest monthly decline is largely due to the shortage of inventory and fast-rising home prices," said Lawrence Yun, NAR’s chief economist. "It is important to keep in mind that the current sales and prices are far stronger than a year ago." (more here)

The chart below gives us a snapshot of the index since 2001. The MoM came in at -2.6%, down from a 0.9% decrease last month. Investing.com had forecast an increase of 0.2%. The index is below its all-time high.

Pending Home Sales

Over this time frame, the US population has grown by 16.5%. 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.

Pending Home Sales Growth

The index for the most recent month is currently 5% below its all-time high. The population-adjusted index is 12% off its 2005 high.

Pending versus Existing Home Sales

The NAR explains that "because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing Home Sales by a month or two." Here is a growth overlay of the two series. The general correlation, as expected, is close. And a close look at the numbers supports the NAR's assessment that their pending sales series is a leading index.