Tag 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 declines in February

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

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