Pending Home Sales index declines in February
by Bill McBride on 3/27/2013
From the NAR: Pending Home Sales Slip on Constrained Inventory
The Pending Home Sales Index, a forward-looking indicator based on contract signings, slipped 0.4 percent to 104.8 in February from a downwardly revised 105.2 in January, but is 8.4 percent higher than February 2012 when it was 96.6. Contract activity has been above year-ago levels for the past 22 months; the data reflect contracts but not closings.
The PHSI in the Northeast declined 2.5 percent to 82.8 in February but is 6.8 percent above February 2012. In the Midwest the index rose 0.4 percent to 103.6 in February and is 13.2 percent higher than a year ago. Pending home sales in the South slipped 0.3 percent to an index of 118.8 in February but are 12.1 percent above February 2012. In the West the index increased 0.1 percent in February to 101.4 but is 0.8 percent below a year ago.
“The volume of home sales appears to be leveling off with the constrained inventory conditions, and the leveling of the index means little change is likely in the pace of sales over the next couple months,” [Lawrence Yun , NAR chief economist] said.
Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in March and April.
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 is that the number of conventional sales is increasing while foreclosures and short sales decline – and that is a sign of an improving market, even if total sales decline.
Read more at http://www.calculatedriskblog.com/2013/03/pending-home-sales-index-declines-in.html#Apd3XLLlpo5A7UsQ.99
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.
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