Monthly pending home sales rise, still below 2010 levels

by KERRI PANCHUK –Housingwire.com

Pending home sales increased 2.1% in February even though the index measuring sales activity is still 8.2% below year-ago levels, according to the National Association of Realtors.

NAR’s Pending Home Sales Index is a barometer of home sales, which bases its analysis of pending home sales activity on the number of sale contracts signed each month.

The index rose 2.1% between January and February, hitting 90.8 last month on the index scale, compared to 88.9 in January. The index for the same month in 2010 held at 98.9.

"Month-to-month movements can be instructive, but in this uneven recovery it’s important to look at the longer term performance," Lawrence Yun, NAR chief economist, said. "Pending home sales have trended up very nicely since bottoming out last June, even with periodic monthly declines. Contract activity is now 20 percent above the low point immediately following expiration of the home buyer tax credit."

He added, "All of the regions saw gains except for the Northeast, where unusually bad winter weather may have curtailed some shopping and contract activity."

The pending home sales index in the northeast fell 10.9% last month to 65.5, 18.4% below year ago levels.

Meanwhile, in the Midwest, the index rose 4% in February, hitting 81.1%. Pending home sales in the south also increased 2.7% with the index reaching 100.3; and in the west the index rose 7%, hitting 105.6.

"We may not see notable gains in existing-home sales in the near term, but they’re expected to rise 5 to 10 percent this year with the economic recovery, job creation and excellent affordability conditions providing confidence to buyers who’ve been on the sidelines," Yun said.

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