Pending Home Sales Index

RECENT NEWS
newratings.com  Mar 27  Comment 
WASHINGTON (dpa-AFX) - Pending home sales in the U.S. decreased for the eighth consecutive month in February, according to a report released by the National Association of Realtors on Thursday. NAR said its pending home sales index dropped by 0.8...
Yahoo  Feb 28  Comment 
The National Association of Realtors said its pending home sales index, based on contracts signed last month, rose 0.1 percent to 95.0 in January. "Ongoing disruptive weather patterns in much of the U.S. inhibited home shopping," Lawrence Yun,...
DailyFinance  Jan 30  Comment 
WASHINGTON, DC -- (Marketwired) -- 01/30/14 -- Pending home sales measurably dropped in December, with abnormal weather partly inhibiting home shopping in much of the U.S., according to the National Association of Realtors®. Declines were...
SeekingAlpha  Jan 2  Comment 
By Dave Kranzler: The National Association of Realtor's Pending Home Sale Index for November was released Monday morning. While it showed a slight increase using the seasonally adjusted annualized data, it missed expectations by a wide margin. In...
New York Times  Nov 26  Comment 
A pending home sales index dropped as a result of higher mortgage rates, price increases and the 16-day partial government shutdown.     
Yahoo  Nov 25  Comment 
The National Association of Realtors said on Monday its Pending Home Sales Index, based on contracts signed last month, slipped 0.6 percent to 102.1, the lowest level since December.
USAToday.com  Oct 28  Comment 
September pending home sales index below last year's level.
Wall Street Journal  Aug 28  Comment 
The number of Americans signing contracts to buy previously owned homes fell in July for the second consecutive month, the latest sign that higher mortgage rates are starting to drag down the housing recovery.
MarketWatch  May 30  Comment 
Pointing to housing-market growth, pending sales of homes ticked up 0.3% in April, with gains in the Northeast and Midwest, but decreases in the South and the West, the National Association of Realtors reported Thursday. Despite April's slight...
Benzinga  Apr 29  Comment 
The National Association of Realtors released its Pending Home Sales Index Monday. The group reported that, even though pending home sales increased in March and are above year-ago levels, “contract activity in recent months shows only modest...




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The Pending Home Sales Index (PHSI) is released by the National Association of Realtors to measure housing contract activity. Released during the first week of each month, the index is based on signed real estate contracts for existing single-family homes, condos and co-ops. A pending sale is not counted as a sale until the transaction is closed. Hence, one must understand that pending home sales index is a leading indicator for existing home sales, not new home sales. It only helps to predict actual home sales activity as pending home sales generally become existing home sales one to two months later.[1]

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Both pending home sales and existing home sales dipped because of the credit crunch in 2007.[2]

Why is it important?

The index not only provides a gauge for housing demand, but also economic strength. Increase in the index shows that people are in good financial positions to purchase new homes. Furthermore, this index has a powerful multiplier effect through the economy. The multiplier effect can be seen from the realtor's point of view and also from the home buyer's point of view. Each time a home is resold, it will generate income for the realtors. Increase in income will lead to more consumption opportunities. As for the home buyers, consumer spending will also increase since they will have to purchase furniture and electrical appliances to furnish the new home. Trends in the pending sales data also has direct influence on stocks of home builders, mortgage lenders, and home furnishing companies.[3]

References

  1. National Association of Realtor: Pending Home Sales Index (PHSI)
  2. The big picture: Pending home sales index falls 6.8%
  3. Econoday: 2010 Economic Calendar
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