October 29, 2012 (Chris Moore)
Signed contracts for the purchase of existing homes posted a modest gain from August to September but were still far above the previous year’s levels according to the National Association of Realtors® (NAR) Pending Home Sales Index (PHSI).
Contract signings increased a modest 0.3 percent to 99.5 in September from 99.2 in August and were 14.5 percent higher than in September of last year when the Index was at 86.9.
Last month’s gain still left the Index at roughly the same level as April 2010 when home purchasing activity had been artificially induced by the home buyer tax credit.
Lawrence Yun, chief economist of NAR, stated, “Home contract activity remains at an elevated level in contrast with recent years, but currently appears to be bouncing around in a narrow range. This means only minor movement is likely in near-term existing-home sales, but with positive underlying market fundamentals they should continue on an uptrend in 2013.”
Three of the four regions in the Index posted increases in their monthly level of sales contract activity, which was in stark contrast to August when three of the four regions reported declines. All four regions reported a higher level of contract signings compared to a year ago.
The Midwest recorded the only decline in monthly signed contracts, falling 5.8 percent from August. The West posted the largest increase, climbing 4.3 percent from the previous month while the Northeast and the South posted gains of 1.4 and 1.0 percent, respectively.
Compared to September 2011, the Northeast reported the largest increase of 26.1 percent followed by the Midwest with a 19.3 percent gain while the South and the West posted gains of 17.6 and 0.8 percent, respectively.
The PHSI is a forward looking indicator which generally indicates closings one to two months in the future.
Tags: pending home sales, existing home sales, contract signings