Uneven road continues: Pending home sales rise

March saw another increase in pending home sales, continuing a see-saw trend of activity. Signed contracts to purchase homes have been up in six of the past nine months, according to the National Association of Realtors.

The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 5.1 percent to 94.1 in March from a downwardly revised 89.5 in February. The index is 11.4 percent below 106.2 in March 2010.

However, NAR points to elevated levels in March and April of 2010 to meet the contract deadline for the home buyer tax credit.
The data reflects contracts but not closings, which normally occur with a lag time of one or two months.

“Since reaching a cyclical bottom last June, pending home sales have posted an overall gain of 24 percent and demonstrate the market is recovering on its own,” said Lawrence Yun, NAR’s chief economist. “The index means modest near-term gains in existing-home sales are likely, which would be even stronger if tight mortgage lending criteria returned to normal, safe standards.”

The Pending Home Sales Index in the West increased 3.1 percent to 103.7 but is 4.1 percent below a year ago.