Pending Home Sales Show Healthy Gain

Anna Maria Northshore Home with Beautiful Gulf View

WASHINGTON – April 05, 2010 – Pending home sales rose in February, potentially signaling a second surge of home sales in response to the homebuyer tax credit, according to the National Association of Realtors® (NAR).

The Pending Home Sales Index (PHSI) (http://www.realtor.org/research/research/phsdata), a forward-looking indicator based on contracts signed in February, rose 8.2 percent to 97.6 from a downwardly revised 90.2 in January. The Index is 17.3 percent above February 2009 when it was 83.2. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, says the improvement is another hopeful sign. “The rise in buyer contact activity may signal the early stages of a second surge of home sales this spring. The healthy gain hints home prices are continuing to flatten,” he says. “We need a second surge to meaningfully draw down inventory and definitively stabilize home values.”

The PHSI in the Northeast rose 9.0 percent to 77.7 in February and is 18.9 percent higher than February 2009. In the Midwest, the index jumped 21.8 percent to 97.9 and is 18.7 percent above a year ago. Pending home sales in the South increased 9.2 percent to an index of 107.0, and the index is 17.5 percent higher than February 2009. In the West, the index fell 4.8 percent to 98.0 but is 14.6 percent above a year ago.

“Anecdotally, we’re hearing about a rise of activity in recent weeks with ongoing reports of multiple offers in more markets, so the March data could demonstrate additional improvement from buyers responding to the tax credit,” Yun says.

Pending home sales show healthy gain, hint at spring surge

Housing News Sends Stocks Higher

By Steve Shaeffer – Forbes.com – February 2, 20010, 12:45 PM EST

Aside from some wobbles around the opening bell, Wall Street rallied Tuesday to extend Monday’s gains.

The biggest news came out of the housing space, where a key indicator for home sales offered an encouraging sign and a builder posted its first profit in nearly three years.

Chief Economist Lawrence Yun said that while the home-buyer tax credit has produced some swings in contract activity, the underlying trend over the past year has been one of improvement, a view reinforced by fourth-quarter results from D.R. Horton ( DHI – news – people ).

Shares of the home builder jumped 10.9% after it reported its first quarterly profit since 2007. (See “D.R. Horton Builds A Profit.”) D.R. Horton said new orders and completed sales increased significantly in the quarter.

Complete Story

Aside from some wobbles around the opening bell, Wall Street rallied Tuesday to extend Monday’s gains. The biggest news came out of the housing space, where a key indicator for home sales offered an encouraging sign and a builder posted its first profit in nearly three years.

The National Association of Realtors said its pending home sales index, which measures signed contracts and is considered a strong predictor of sales in coming months, inched up 1% in December to 96.6. Chief Economist Lawrence Yun said that while the home-buyer tax credit has produced some swings in contract activity, the underlying trend over the past year has been one of improvement, a view reinforced by fourth-quarter results from D.R. Horton ( DHI – news – people ).