NAR: Pending Home Sales index increases slightly in April
by Bill McBride on 5/30/2013
From the NAR: Pending Home Sales Edge Up in April
The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 0.3 percent to 106.0 in April from 105.7 in March, and is 10.3 percent above April 2012 when it was 96.1; the data reflect contracts but not closings.
Home contract activity is at the highest level since the index hit 110.9 in April 2010, immediately before the deadline for the home buyer tax credit. Pending sales have been above year-ago levels for the past 24 months.
The PHSI in the Northeast jumped 11.5 percent to 92.3 in April and is 17.7 percent above a year ago. In the Midwest the index rose 3.2 percent to 107.1 in April and is 15.1 percent higher than April 2012. Pending home sales in the South slipped 1.1 percent to an index of 119.2 in April but are 12.3 percent above a year ago. With pronounced inventory constraints, the index in the West fell 7.6 percent in April to 94.6 and is 2.6 percent below April 2012.
Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in May and June.
With limited inventory at the low end and fewer foreclosures, we might see flat or even declining existing home sales. The key is that the number of conventional sales is increasing while foreclosures and short sales decline – and that is a sign of an improving market (although with significant investor buying), even if total sales decline.
Read more at http://www.calculatedriskblog.com/2013/05/nar-pending-home-sales-index-increases.html#Axk2u9O0fltFroHu.99
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.
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.