Pending Home Sales Index

From Realtor.org, "Nine Consecutive Gains for Pending Home Sales":

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, increased 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.

Pending home sales region by region:

The PHSI in the Northeast surged 19.9 percent to 100.2 in October and is 44.2 percent above a year ago. In the Midwest the index rose 11.6 percent to 109.6 and is 36.6 percent higher than October 2008. Pending home sales in the South increased 5.4 percent to an index of 115.4, which is 31.6 percent above a year ago. In the West the index fell 11.2 percent to 127.7 but is 21.9 percent above October 2008.

The tax credits are helping? Lawrence Yun, NAR chief economist, thinks so:

... home sales are experiencing a pendulum swing. 'Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus,' he said. 'This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.'

Is the housing market improving or is it simply being propped up in the short term by government stimulus?

Pending Home Sales Index - September 2009

As reported by CNNMoney.com - "Home sales contracts rise for 8th straight month":

The number of signed sales contracts to buy homes rose in September for the eighth straight month, according to a real estate industry report released Monday.

The September Pending Home Sales Index from the National Association of Realtors (NAR) spiked 6.1% to 110.1, consolidating a 6.4% gain in August. It was the index's highest level since December 2006, when it stood at 112.8.

The leap was far better than expected. A panel of analysts surveyed by Briefing.com had forecast a 1.2% rise.

No doubt the first-time homebuyer tax credit program is helping to boost sales. A large majority of this activity will subside if the first-time homebuyer tax credit program is not extended. The House is expected to vote and extend the credit on November 5, 2009. It also appears, in addition to the $8,000.00 credit expected to be extended to first-time homebuyers, that a new $6,500.00 credit will be offered to existing homeowners who have owned their homes for 3, 5, or 7 years.

October Pending Home Sales Numbers Stronger Than Expected

From CNNMoney.com - "October pending home sales slip 1%":

Despite a meltdown in financial markets, a credit freeze and soaring unemployment, housing markets fared better than expected in October.

Pending home sales fell just 1% year over year according to a report out today from the National Association of Realtors (NAR), and were down 0.7% from September. Analysts surveyed by Briefing.com had expected pending sales to slip by 3.6% year over year, and by 3% from September.

Different regions, drastically different numbers.

NAR found that sales in the West climbed 17.4% in October, compared with a year ago. Northeast sales plunged 14.1% year-over-year; Midwest sales dropped 6.8%; and sales in the South inched down 2.9%.

Real Estate is local! Values in many western regions have fallen so far it seems like some stabilization is trying to occur when you look year over year. No surprise as we should be getting to that point in areas like California. The problem remains the underlying economic conditions which will continue to slow down and negatively impact the stabilization process.