Category Archives: PHSI

Eye on Housing: Pending Home Sales Increase Modestly

Pending Home Sales Increase Modestly

by Stephen Melman Eye on Housing 

The Pending Home Sales Index, a forward-looking indicator based on signed contracts, increased 1.5% in March 2013 to 105.7 from a downwardly revised 104.1 in February. The March 2013 PHSI reported by the National Association of Realtors (NAR) was 7.0% higher than the same period a year ago.  NAR reported that pending home sales have been above their previous year levels for the past 23 months.

Pending Home Sales March 2013

The modest increase in the PHSI mirrored last week’s reported total1.5% increase in March new home sales. The March PHSI was consistent across the regions. The PHSI was flat in the Northeast and increased 0.3% in the Midwest, 2.7% in the South and 1.5% in the West. By contrast, March new home sales increased sharply from the previous month in the Northeast and South, but decreased in the Midwest and West. Year over year, the PHSI decreased 4.3% in the West, but increased 6.3%, 13.7% and 10.4% in the Northeast, Midwest and South respectively.

NAR attributed the modest PHSI increase to limited inventory, despite reporting a slight increase in the March inventory level. Rising prices will continue to induce more homeowners to place their homes on the market and broaden choices for potential home buyers. Rising prices might also dampen the enthusiasm of all-cash investors, and further ease the pressure on inventory.

If contracts closed at the same time they were signed, this graph would be the correspondence between sales and the PHSI. So the PHSI is a good indicator of what will likely happen to existing home sales when the contracts close in coming months. We anticipate that the April 2013 and May 2013 existing sales data will reflect today’s pending sales report, suggesting continued moderation in existing home sales as we move through the spring.

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CR: Pending Home Sales index increased in January

Pending Home Sales index increased in January

by Bill McBride on 2/27/2013 

From the NAR: January Pending Home Sales Up in All Regions

The Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 4.5 percent to 105.9 in January from a downwardly revised 101.3 in December and is 9.5 percent above January 2012 when it was 96.7. The data reflect contracts but not closings.

The January index is the highest reading since April 2010 when it hit 110.9, just before the deadline for the home buyer tax credit. Aside from spikes induced by the tax credits, the last time there was a higher reading was in February 2007 when it reached 107.9.

The PHSI in the Northeast rose 8.2 percent to 84.8 in January and is 10.5 percent higher than January 2012. In the Midwest the index increased 4.5 percent to 105.0 in January and is 17.7 percent above a year ago. Pending home sales in the South rose 5.9 percent to an index of 119.3 in January and are 11.3 percent higher January 2012. In the West the index edged up 0.1 percent in January to 102.1 but is 1.5 percent below a year ago.
emphasis added

Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in February and March.

Also the NAR economist lowered his forecast for sales in 2013 to 5.0 million.  With limited inventory at the low end, and fewer foreclosures, we might see flat or even declining existing home sales this year. The key for sales is that the number of conventional sales is increasing while foreclosure and short sales decline.

Read more at http://www.calculatedriskblog.com/2013/02/pending-home-sales-index-increased-in.html#eG2G5qmgdz6zjMY5.99

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CR: Pending Home Sales index declines in December

Pending Home Sales index declines in December

by Bill McBride on 1/28/2013  

From the NAR: Pending Home Sales Down in December but Remain on Uptrend

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, fell 4.3 percent to 101.7 in December from 106.3 in November but is 6.9 percent higher than December 2011 when it was 95.1. The data reflect contracts but not closings.

Lawrence Yun , NAR chief economist, said there is an uneven uptrend. “The supply limitation appears to be the main factor holding back contract signings in the past month. Still, contract activity has risen for 20 straight months on a year-over-year basis,” he said. “Buyer interest remains solid, as evidenced by a separate Realtor® survey which shows that buyer foot traffic is easily outpacing seller traffic.”

Yun said shortages of available inventory are limiting sales in some areas. “Supplies of homes costing less than $100,000 are tight in much of the country, especially in the West, so first-time buyers have fewer options,” he said …

The PHSI in the Northeast fell 5.4 percent to 78.8 in December but is 8.4 percent higher than December 2011. In the Midwest the index rose 0.9 percent to 104.8 in December and is 14.4 percent above a year ago. Pending home sales in the South declined 4.5 percent to an index of 111.5 in December but are 10.1 percent higher December 2011. In the West the index fell 8.2 percent in December to 101.0 and is 5.3 percent below a year ago.

Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in January and February.

As I’ve noted several times, with limited inventory at the low end and fewer foreclosures, we might see flat or even declining existing home sales. The key for sales is that the number of conventional sales is increasing while foreclosure and short sales decline.

Read more at http://www.calculatedriskblog.com/2013/01/pending-home-sales-index-declines-in.html#2hx5u5QhL7xdcTtJ.99

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November Pending Home Sales Continue Upward Trend

November Pending Home Sales Continue Upward Trend

by Stephen Melman — Eye on Housing

The Pending Home Sales Index, a forward-looking indicator based on signed contracts, increased 1.7% in November 2012 to 106.4, up from the downwardly revised 104.6 in October. The November 2012 PHSI was 9.8% higher than the same period a year ago, and reached the highest level since April 2010 when the home buyer tax credit was expiring.

Regionally, the National Association of Realtors (NAR) reported mixed results for the November 2012 PHSI. The Northeast and West showed the most improvement, with respective monthly increases of 5.2% and 4.2%. The Midwest was up 0.1% in November and the South was unchanged from the previous month.  Compared to a year ago, the Northeast and Midwest were both up 15.2%, and the South was up 13.9%. The November 2012 PHSI in the West was down 3.2% from the same period a year ago.

Pending Home Sales November 2012

If contracts closed at the same time they were signed, this graph would be the correspondence between sales and the PHSI. So the PHSI is a good indicator of what will likely happen to existing home sales when the contracts close in coming months. We anticipate that the December 2012 and January 2013 existing sales data will reflect today’s pending sales report, suggesting that existing home sales are likely to rise as we move to 2013.

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Pending Home Sales Increase for March

Pending Home Sales Increase

by Stephen Melman — Eye on Housing

The Pending Home Sales Index, a forward-looking indicator based on signed contracts, increased 4.1 percent in March to its highest level since April 2010 when the federal homebuyer tax credit program was ending. The March increase was on top of an upwardly revised February 2012 PHSI of 97.4, and the PHSI is now 12.8 percent above the March 2011 level. In April 2010, the PHSI reached 111.3 as first-time buyers acted on the opportunity provided by the tax credit.

The National Association of Realtors (NAR) reported that over the past year the PHSI increased strongly in all regions, despite small March declines in the Northeast and Midwest of less than 1 percent. The year over year increases were 21.1 percent in the Northeast, 16.9 percent in the Midwest, 10.6 percent in the South and 9.0 percent in the West.

 If contracts closed at the same time they were signed, this graph would be the correspondence between sales and the PHSI. So the PHSI is a good indicator of what is likely to happen with existing home sales which are the contract closings. We anticipate that April and May existing sales that will be reported on May 22, 2012 and June 21, 2012, will reflect the closing of contracts signed and driving today’s very robust PHSI.

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Pending Home Sales Index July 2009

According to NAR:

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, increased 3.2 percent to 97.6 from a reading of 94.6 in June, and is 12.0 percent higher than July 2008 when it was 87.1.  The index is at the highest level since June 2007 when it was 100.7.

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