Pending Home Sales Reach Highest Point Since April 2010 Tax Credit Deadline

Pending home sales in April rose arnslight 0.3 percent to 106.0 on the National Association of Realtors®rn(NAR) Pending Home Sales Index (PHSI). In March the index was atrn105.7. The index is now 10.3 percent above the April 2012 level ofrn96.1 continuing a 24 month pattern of year-over-year increases. </p

ThernApril Index is the highest since April 2010, immediately before therndeadline to qualify for home buyer tax credits. In that period thernIndex hit 110.9.</p

NAR’srnPHSI reflects contract signings not home sales. It is a forwardrnlooking index that general portends actual sales transactions 30 torn60 days later. </p

Lawrence Yun, NAR chiefrneconomist, said a familiar pattern has developed.  “Thernhousing market continues to squeak out gains from already veryrnpositive conditions.  Pending contracts so far this year easilyrncorrespond to higher closed home sales in 2013,” he said. rnTotal existing-home sales are expected to rise just over 7 percent tornabout 5 million this year.</p

“Because of inventoryrnshortages, higher home sales will push up home values to the highestrnlevel in five years,” Yun said.  The national medianrnexisting-home price should increase close to 8 percent and exceedrn$190,000 in 2013.</p

Pending home sale gains in thernNortheast and Midwest were offset largely by declines in the West andrnSouth. In the Northeast contract activity jumped 11.5 percent to arnPHSI of 92.3 in April and was 17.7 percent above a year ago.  Inrnthe Midwest the index rose 3.2 percent to 107.1 and was 15.1 percentrnhigher than April 2012.  Pending home sales in the South slippedrn1.1 percent to an index of 119.2 in April but remained 12.3 percentrnabove a year ago.  With pronounced inventory constraints, thernindex in the West fell 7.6 percent in April to 94.6 and was 2.6rnpercent below April 2012. </p

NAR’s PHSI is based on a largernnational sample, typically representing about 20 percent ofrntransactions for existing-home sales.  An index of 100 is equalrnto the average level of contract activity during 2001, which was thernfirst year to be examined. 

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