Pending Home Sales is an indicator released by the National Association of Realtors and shows the change in the number of homes under contract to be sold, but still awaiting the closing transaction, excluding new construction.
Because of the name of the indicator suggests, pending, these transactions never actually happened, at least not yet, and this is why it should be treated with caution and why this is considered to be a second tier indicator, basically bringing no volatility at all to the markets. However, due to the fact that it refers to the housing industry, if actual is way more different than the current one, than it implies possible same values for other housing indicators (New Home Sales, Existing Home Sales, etc), and it might signal troubles for the industry as a whole.
The most important things to take into consideration when looking at Pending Home Sales indicator are the following:
- Release date: monthly, about 28 days after the month ends;
- release time: 14:00 GMT, during the North American trading session;
- second tier data;
- shows something that may/may not be sold;
- market usually ignores it, except for big differences between the actual vs. the forecast number