Pending Home Sales Index

What Is Pending Home Sales?

The Pending Home Sales Index (PHSI) is a monthly leading indicator of US home sales produced by the National Association of Realtors. It measures the number of homes under contract (signed but not closed) and is reported as a seasonally-adjusted index where 100 equals the 2001 average.

The contract-to-closing window for a typical US home sale is 30-60 days, so pending home sales lead existing home sales by 1-2 months. The series is one of the cleanest leading indicators of housing-market transaction activity.

Why It Matters for Markets

Pending home sales is a top-tier housing-sector leading indicator. It moves homebuilders, mortgage REITs, title insurers, and other housing-exposed equities on release day. The 10-year Treasury reacts to surprises because of the implications for residential investment and consumer spending.

The Fed and many forecasters use pending home sales to nowcast existing home sales and ultimately the residential investment line of GDP. Strong pending prints signal forthcoming closings; weak pending prints predict weaker existing home sales.

How to Read the Print

Year-over-year vs month-over-month. As with most housing series, both are useful but the MoM is noisier.

Regional breakdown. The NAR publishes pending sales by Census region (Northeast, Midwest, South, West). Regional dispersion reveals dynamics: Sunbelt regions typically lead during expansions; coastal markets are more rate-sensitive.

Pending vs existing sales gap. When pending is much stronger than existing, it signals a contract-to-closing backlog (positive for next month's existing sales). When pending is weak relative to existing, it signals the most recent closings are not being replenished.

Historical Context

The PHSI peaked in 2005 at 128 during the housing bubble, fell to 67 in 2010 during the post-crisis low, then recovered and reached 130 in August 2020 during the pandemic-era housing surge. The 2022-2023 rate-hike cycle drove the index down to 73-75 in 2023, the lowest in the data series outside the GFC.

Through 2024-2025, pending home sales has run in the 75-80 range — well below the 2010s norm of 105-115. The persistent weakness reflects the affordability crunch (high mortgage rates plus elevated home prices) and the lock-in effect (existing homeowners with sub-4% mortgages reluctant to sell and reset to 7%+). Watch for sustained recovery toward 90+ as the cleanest signal that the housing-market freeze is breaking.