A
forward-looking indicator
based on pending home
sales shows the market is
likely to stabilize in the
months ahead, according to
the National Association
of Realtors®.
The Pending Home Sales
Index based on contracts
signed in June, was 5.0
percent higher from the
downwardly revised May
index of 97.5, but is 8.6
percent below June 2006
when it stood at 112.0.
This 5.0 percent monthly
gain is the largest in
more than three years,
since a 6.1 percent
increase in March 2004.
Lawrence
Yun, NAR senior economist,
said it is encouraging
that the increase occurred
in all four major regions.
“However, it is too
early to say if home sales
have already passed
bottom,” he said.
“Still, major declines
in home sales are likely
to have occurred already
and further declines, if
any, are likely to be
modest given the
accumulating pent-up
demand.”
The
index is a leading
indicator for the housing
sector, based on pending
sales of existing homes. A
sale is listed as pending
when the contract has been
signed but the transaction
has not closed, though the
sale usually is finalized
within one or two months
of signing.
An index
of 100 is equal to the
average level of contract
activity during 2001,
which was the first year
to be examined as well as
the first of five
consecutive record years
for existing-home sales.
Annual
changes in the index are
more closely related to
actual market performance
than are month-to-month
comparisons. As the
relatively new index
matures and seasonal
adjustment factors are
refined, the
month-to-month comparisons
will become more
meaningful.
The
PHSI in the West increased
8.6 percent in June to
103.6 but was 5.5 percent
below a year ago. In
the Northeast, the index
rose 3.1 percent from May
to 96.0 but is 2.4 percent
lower than June 2006.
The index in the South
increased 4.7 percent in
June to 111.6 but was 12.7
percent below a year ago.
In the
Midwest
, the index rose 3.5
percent in June to 92.5
but was 8.2 percent lower
than June 2006.
Information
courtesy of NAR
The
purpose of this newsletter
is not to give advice. The
purpose is to stimulate
thought for our clients
and professionals within
our network.
If you are a professional
receiving this newsletter
or know of one, please
contact our office to
introduce yourself and
your services to us. We
are always seeking to grow
our referral network and
expose professional
services to our client
base.
The loan professional that
has made this information
available specializes in
equity repositioning
solutions for those
buying, selling or
refinancing real estate. |
