The National Association of Realtors (NAR) seasonally adjusted pending home sales index improved and remains in expansion for the third month in a row after a year in contraction. Our analysis of pending home sales however is darker – and we are projecting a bad month for December existing home sales.

Pending home sales are based on contract signings, and existing home sales are based on the execution of the contract (contract closing).

The NAR reported:

Econintersect‘s evaluation using unadjusted data:

Unadjusted 3 Month Rolling Average of Year-over-Year Growth for Pending Home Sales (blue line) and Existing Home Sales (red line)

From Lawrence Yun , NAR chief economist:

…. signed contracts inched forward in November and have been fairly stable but haven't broken out even as the economy picked up steam this spring. The consistent economic growth and steady hiring we've seen the second half of this year is giving buyers enough assurance to consider purchasing a home before year's end. With rents now rising at a seven-year high, historically low rates and moderating price growth are likely to entice more buyers to enter the market in upcoming months.

…. falling gas prices will likely boost consumer confidence and allow prospective buyers the opportunity to save additional money for a downpayment. NAR's 2014 Profile of Home Buyers and Sellers (released in November) found that the median downpayment ranged from 6 percent for first-time buyers to 13 percent for repeat buyers.