Economic Charts

Collapse: Pending Home Sales Index Is Warning Investors

Updated: Jun 01, 2024 | Published: Jun 01, 2024
Verified Investing
By Verified Investing
Collapse: Pending Home Sales Index Is Warning Investors

The Pending Home Sales Index is a forward-looking indicator that alerts investors to contract signings. It is put out by the National Association of Realtors. A number of 100 is classified as neutral.

The latest reading in April 2024 came in at 72.3, alerting investors and homebuyers to a major slowdown in the housing market. In fact, the current reading is near the Covid panic lows. This was when everyone thought the world was ending. It is also near the lowest levels going back to the start of the Pending Home Sales Index in 2001. This means it even covers the Great Recession, Financial Crisis lows when the housing market collapsed.

Inventories are up 30% from last year. This whole narrative that there is no supply is quickly changing.