Pending Sales Slipped Slightly in February

Pending home sales reported by thernNational Association of Realtors® declined by one-half of one percent inrnFebruary but are well above the level reported one year earlier.  The Pending Home Sales Index (PHSI) releasedrnon Monday was 96.5 compared to 97.0 in January. rnThe Index in February was 9.2 percent above the level in February 2011 whenrnit stood at 88.4.</p

The PHSI is a forward-looking indicator based on signed home salesrncontracts.  The data reflects contractedrnsales but not closings which typically are finalized within one or two monthsrnof signing.</p

Pending sales rose in the Midwestrnbut declined in the other three regions. rnThe Midwest PHSI was 93.8, up 6.5 percent from January and 19.0 percentrnyear-over-year.  In the Northeast therernwas a 0.6 percent decrease from January to 77.7, 18.4 percent higher thanrnFebruary, 2011.  The South was down 3.0rnpercent from January to 105.8, 7.8 percent higher than the index one year earlier.  In the West the index decreased bothrnmonth-over-month and year-over-year by 2.6 percent and 1.8 percentrnrespectively.</p

Lawrence Yun, NAR chief economist,rnsaid we’re seeing the continuation of an uneven but higher sales pattern. “Thernspring home buying season looks bright because of an elevated level of contractrnoffers so far this year,” he said. “If activity is sustained near presentrnlevels, existing-home sales will see their best performance in five years.rnBased on all of the factors in the current market, that’s what we’re expectingrnwith sales rising 7 to 10 percent in 2012.”</p

The PHSI is based on a large national sample, typically representing aboutrn20 percent of transactions for existing-home sales. An index of 100 is equal tornthe average level of contract activity during 2001, the year the index wasrncreated as well as the first of five consecutive record years for existing-homernsales; it coincides with a level that is historically healthy.

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