Pending Sales Slipped Slightly in February

Pending home sales reported by the
National Association of Realtors® declined by one-half of one percent in
February but are well above the level reported one year earlier.  The Pending Home Sales Index (PHSI) released
on Monday was 96.5 compared to 97.0 in January. 
The Index in February was 9.2 percent above the level in February 2011 when
it stood at 88.4.

The PHSI is a forward-looking indicator based on signed home sales
contracts.  The data reflects contracted
sales but not closings which typically are finalized within one or two months
of signing.

Pending sales rose in the Midwest
but declined in the other three regions. 
The Midwest PHSI was 93.8, up 6.5 percent from January and 19.0 percent
year-over-year.  In the Northeast there
was a 0.6 percent decrease from January to 77.7, 18.4 percent higher than
February, 2011.  The South was down 3.0
percent from January to 105.8, 7.8 percent higher than the index one year earlier.  In the West the index decreased both
month-over-month and year-over-year by 2.6 percent and 1.8 percent

Lawrence Yun, NAR chief economist,
said we’re seeing the continuation of an uneven but higher sales pattern. “The
spring home buying season looks bright because of an elevated level of contract
offers so far this year,” he said. “If activity is sustained near present
levels, existing-home sales will see their best performance in five years.
Based on all of the factors in the current market, that’s what we’re expecting
with sales rising 7 to 10 percent in 2012.”

The PHSI is based on a large national sample, typically representing about
20 percent of transactions for existing-home sales. An index of 100 is equal to
the average level of contract activity during 2001, the year the index was
created as well as the first of five consecutive record years for existing-home
sales; it coincides with a level that is historically healthy.

…(read more)

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